SVN Buys Office/Retail Complex for $11M

OVERLAND PARK, KS-SVN Equities has purchased 95 Metcalf Square, a nine-building, 151,478-sf office/retail property, from Washington, DC-based CW Capital Management for $11 million. The 23-year-old property, at 67% occupied, is at 7171 West 95th St. here, and sold for a cap rate of 6.8%.

The property consists of a six-story office building, a few two-story and three-story office buildings, and a couple retail outbuildings that includes a Red Robin restaurant. Most of the vacancy is in the office space, says Gibson Kerr with Sperry Van Ness in Kansas City, MO, who represented SVN. There’s only a couple of vacancies in the retail space, he tells GlobeSt.com.

“What happened here, the office space was 100% leased to Spring, but then they built a four million sf campus in Overland Park and bailed out of this building and a bunch of other buildings,” Kerr says. “This was right after Sept. 11, and the dot-com implosion. The vacancy rate skyrocketed here and the market nosedived, and this complex was one of the victims. It was foreclosed on, and held by the lender for the last couple of years.”

He says SVN bought the complex as a value-add property. “The property is right for a turnaround,” Kerr says.

The area is doing much better these days, he says. “The market has come roaring back in the past couple of years, now the vacancy rate is just approaching 10%,” Kerr says. “We anticipate a lot of new space going up, but they can’t build unless they get rates of $23 per sf or more. Everybody is anticipating that rental rates will go up.” He says lease rates at 95 Metcalf are 16.50 per sf on average.