Third Time the Charm on 235,000-SF Deal

DALLAS-Though the deal more or less sailed through closing without a hitch, getting the landmark 235,000-square-foot Highland Park Village to the closing table was a challenge. During the entire process, the center fell out of escrow twice, before Dallas residents Ray and Heather Wasburne and Stephen and Elisa Summers closed on the asset for $170 million.

Henry S. Miller III with seller Henry S. Miller Interests says he and his partners hadn’t really entertained the idea of selling the retail center at Preston Road and Mockingbird Lane until a chance lunch he had about three years ago with the real estate head of Gucci Group NV. “He was telling me they had a building on Rodeo Drive they were trying to sell on the basis of a 3 cap,” Miller tells GlobeSt.com. “That started the wheels turning, and I thought it might be interesting to find out what we could get for Highland Park Village.”

It wasn’t only the potential profit for the 1930s center that motivated a sale, however. Miller says there were succession and tax concerns lying in wait had he and his partners passed the asset on to the next generation. “The two biggest things were, we wanted to realize a good price for the partnership, and we wanted to make sure we could pass the baton to someone with the same appreciation for community service we had,” Miller comments.

David R. Disney with the Disney Group in Dallas put some out feelers to potential buyers, while working with Miller Interests to possibly position the property for sale. The first serious buyer, a Houston REIT, came along about a year ago and made an offer the partners couldn’t refuse. “Unfortunately, the economy didn’t cooperate and they couldn’t get financing,” Miller comments. “When that contract dropped, we got a call from another fellow, telling us others were interested.”

The “others” in question was the Ashkenazy Acquisitions Corp. in New York City. Though a serious potential buyer, Ashkenazy Acquisitions fell into the same financing difficulties as its predecessor. “The economy continued not to cooperate,” Miller remarks. “They wanted to re-negotiate, we weren’t willing to do that, so it just didn’t work out.”

But always in the background, was Ray Washburne of real estate investment holdings Charter Holdings. Washburne’s company also owned the Mi Cocina restaurant in Highland Park Village. Miller says Washburn had shown an interest in the property when Ashkenazy Acquisitions had it under contract.

“When I called Ray and told him the other deal had fallen through, he asked how fast we could get together,” Miller recalls. “The other deal had taken up several months and after that, we weren’t sure what directly we should go in, whether we should keep it or sell it. Ray convinced us he could do the deal on behalf of some of their families’ trust.”

The Washburnes and the Summers, daughters and sons-in-laws of Dallas oilman Al Hill Jr. grew up in the area. Miller says he’d known Wasburne for years, but ended up learning more about him during the escrow period. Much like the other two potential buyers, the Washburns and Summers had trouble with financing. But rather than backing away from the deal or insisting on renegotiating the price, Washburn found other options. “I’ve never met anyone more persistent and patient than Ray,” Miller says. “He didn’t take no for an answer. I gained so much respect for him during this transaction.”

Ultimately, Miller says he’s glad the center went to someone with local ties. “Through the years, a lot of people would call, asking if we’d sell. David Simon (Simon Property Group) would call once or twice a year, asking about it,” he says. “Nothing against David, he’s a wonderful guy. But having local families with ties to the community take this over was the right way to go.”