In a mid-afternoon closing Friday, Somera Investment Partners LLC of Santa Barbara and CoastWood Capital Group LLC of Greenwich, CT, acquired the asset from TCW Realty Advisors, an affiliate of Los Angeles-based CB Richard Ellis Investors LLC. Partnering on the acquisition is Seligman Western Enterprises of San Francisco. Acquisition debt was placed with Deutsche Bank.
The 90%-leased mall, where four of its five anchors own their locations, was developed in 1984 by Chicago-based JMB/Urban, the leasing agent and property manager until the sale. Real estate sources say TCW Realty acquired the deed in lieu of debt in the late 1990s.
Steve Plenge, Somera's managing director, tells GlobeSt.com that the asset first came to market in fall 2001 and spent a year under contract to a private investor. When the deal collapsed, Somera swooped in with an offer before it could bounce back to the market. It's one of those deals in which the selling price is a state secret.
The 39.7-acre purchase includes seven pad sites and 15 acres, enough land to support another 100,000 sf. Leasing and management duties have been turned over to Jones Lang LaSalle. Plenge says the next year will be spent on developing the value-add plan, focusing on the facelift. A Seattle architect, Callison, has been hired to craft the design.
Plenge says talks have begun to fill empty spaces with new retail faces in the next six to 12 months. In the more immediate, a 26,000-sf Linens N Things will open in the fall as backfill for a closed Palais Royal store while Alamo Drafthouse Cinema recently turned on lights in a six-screen theater that's been dark for several years. The mall, sitting on 85.2 acres just 15 miles west of the Houston CBD, is anchored by Dillard's, Foley's, JCPenney, Mervyn's and Sears, the only one in the group that doesn't own its site.
Somera plans to spend $200 million to $300 million per year on retail acquisitions in major metropolitan areas or smaller "destination" cities, focusing on secondary regional and super-regional malls, lifestyle centers and unique urban buildings. Earlier this year, Somera paid about $70 million for the 505,000-sf Victor Valley Mall in the Inland Empire. Plenge says another property is in escrow and another in the pipeline, but neither are in Texas.
The buyers used in-house representation to negotiate the acquisition. George Good with CBRE and Mike Richwine with Colliers International, both in Chicago offices, represented the seller.
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