ARLINGTON, TX-RioCan Real Estate Investment Trust recently has invested a significant portion of capital in the Lone Star State.
The Canadian REIT closed on two retail acquisitions in Texas – Lincoln Square and Sawyer Heights Village – totaling more than $100 million. It also inked an agreement to acquire three more retail properties in the state for $47.4 million. Those deals are slated to close during the third quarter.
“We like Texas,” RioCan CFO Rags Davloor tells GlobeSt.com. “It never suffered from the housing crisis that the rest of the US did. We believe the fundamentals there are very strong.”
Along with Dunhill Partners, RioCan acquired Lincoln Square in Arlington, TX, for $70.7 million, which equates to a cap rate of 7.2% on existing income. The joint venture is set up where RioCan owns 82% and Dunhill owns 18%. To fund the acquisition, the buyers secured a $42.4 million, 10-year loan at an interest rate of 5.05%, according to RioCan.
The 444,500-square-foot Lincoln Square is situated in close proximity to Cowboys Stadium, home of the National Football League's Dallas Cowboys. It is anchored by Ross Dress for Less, Best Buy, Bed, Bath & Beyond, and PetSmart. Other national fashion retailers on the property include Stein Mart, Gap, Ann Taylor and Lane Bryant.
The weighted average lease term for the property is 4.2 years, and 40,850 square feet is vacant. Dunhill will continue to manage the property for the JV.
“We think there is a lot of potential with Lincoln Square,” Davloor says. “There is some vacancy that we can lease up. The property suffered because of the construction [on Interstate 30], and with that out of the way, it’s poised to perform very well.”
As GlobeSt.com reported earlier this month, RioCan acquired Sawyer Heights Village, a 107,626-square-foot shopping center in Houston, in a joint venture with Inland Western Retail Real Estate Trust. The partnership paid $35 million.
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