Benbrooke Realty Investment Co.'s newest local asset is a three-building complex at 3001-21 Gateway Dr. In an unrelated deal, Benbrooke also acquired the Shops at Freedom Shopping Center at 2901 Freedom Dr., three miles west of Charlotte, NC's CBD, in an off-market deal.
Benbrooke, an acknowledged long-term holder, has hired Stream Realty Partners LP in Dallas for the find-and-sign campaign for Gateway West. George Ackerman, a Benbrooke principal, says the complex is "in respectable condition" so the focus is the lease-up. "We stand ready to make investment and intelligent tenant improvements," he tells GlobeSt.com. "We're ready to step up to the plate and lease the building."
Ackerman says there are "five or six" tenants right now, but the Stream team has "three or four" prospects in hand due to groundwork that was laid after it became clear that Benbrooke would score the win. "We're kind of off to a running start," he says. "I anticipate an aggressive marketing campaign. I would be disappointed if we weren't at market occupancy in 18 months." And that, he says is 75% to 85% depending on who's defining it.
Craig Gutow, Benbrooke's principal in Dallas, is spearheading the turnaround drive. As with its other local properties, Trinity Interests in Dallas is the new property manager.
Gateway West I's value-office space in single-story buildings drew the buyer to the deal as did the Las Colinas submarket's leasing activity, according to Ackerman. "It was more about how we viewed the submarket," he adds.
Gateway West I, sold by the Hoctor brothers of Dallas, was marketed by the Grubb & Ellis team of senior vice presidents Darrell Betts and Scot Farber. The complex was developed in 1985 and renovated in 1994.
In Charlotte, Benbrooke took the 180,000-sf Shops at Freedom Shopping Center from a New York City-based partnership that had owned it 20 years, according to Michael Oestreich, a principal on the buy side. The 18-acre shopping center was 60% occupied at sale time. He says the off-market deal was inked at substantially below the replacement cost. In today's building circles, replacement cost is running about $120 per sf.
Oestreich says the immediate plan is to finish roof work and complete interior upgrades for the center, developed in the early 1960s. The present tenant mix is all junior anchors: City Trends, Goodwill, Value Village and Catherine's. The roll, he adds, "is stable near term."
Oestreich says the deal closed with a bridge loan. "Our goal is re-tenant and refinance," he says.
John Nichols, president of the Nichols Co. in Charlotte, and his associate Josh Beaver have the leasing assignment. Colliers Pinkard's local team has been tapped for property management.
Oestreich says the center sits in a submarket now on the cusp of revitalization. "The immediate trade area is poised for meaningful growth," he says, citing plans or projects in the pipeline to add several thousand residential units to Charlotte's west side. Rick Lechtman of New York City-based Ackman-Ziff Real Estate Capital Advisors arranged financing through a Capmark Financial affiliate.
Oestrich says Benbrooke is capable of deploying $100 million. Its focus is North Texas and the Eastern Seaboard. There is a contract pending for another office building in the Dallas/Fort Worth metroplex, he says. "We are not a fund that has to put money out," he stresses. "We have a lot of financial capability, but we're prudent on how we put it out," he says.
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