The locally based Weingarten bought into the portfolio with cash and operating units, Tracy Pursell, the REIT's investor relations director, tells GlobeSt.com. She says the REIT was introduced to Rioco through personal relationships and has been negotiating with the McAllen-area firm at least six to nine months. Under the buy-in agreement, Weingarten will assume management and leasing of the McAllen assets, now boasting an average 91% occupancy.
The largest property in the package is Las Tiendas, a 499,900-sf shopping center at the southeast corner of Expressway 83 and McColl Road. It is anchored by Target and Mervyn's, both corporate-owned stores. The JV's share is 287,700 sf of complementary retail, with the roster headlined by national names like Ross Dress for Less, Marshall's and Office Depot.
Also acquired was the 76,500-sf Northcross at the junction of North 10th Street and Nolana Loop and a 103,700-sf H-E-B store at the northeast corner of South 10th and Houston streets. The Northcross property is anchored by Barnes & Noble and Blockbuster.
The JV agreement launches a development team, with the duet already eyeing projects for three parcels. Ground could break by year's end. According to Pursell, any development would likely be in the 100,000-sf to 400,000-sf range.
In a press release, Drew Alexander, Weingarten's CFO, says national retailers like Target, Best Buy, Ross, Marshall's and Barnes & Noble are focused on putting stores in border cities "to provide goods and services to US residents and Mexican nationals alike. Rioco is a highly successful and well-respected company in the Valley and we believe that this investment is only the beginning of a long-term development/acquisition relationship."
Pursell says the acquisition is the 10th this year to take the year-to-date total to two million sf and $258.1 million in investments. The REIT plans to spend $400 million this year for acquisitions, the bulk of which will be doled out by midyear.
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