Development News: Expanding our Retail Portfolio

April 30th, 2014 by Jennifer Smart

PegasusAblon has recently acquired two strong assets for its Dallas based retail portfolio with investment partner the Lionstone Group. We felt the circumstances which necessitated the seller’s discounts on both assets were items we would be able to correct while adding value to the investment for both our partners and our tenants. Here’s a closer look.

In the fourth quarter of 2013 we acquired the Market Street anchored retail center on Preston Road at Park in Plano. The Market Street project was developed from scratch and delivered to the market in 2009, straight into the teeth of the Great Recession. Though the project was well built and located in a permanent high quality location, only 43% of the 100,000 square feet of grocery anchored inline retail space had been leased upon purchase. A tremendous value add opportunity existed if the remaining retail space could be leased. We are currently engaged in this process, and have very high expectations this will be completed in 2014.

In the first quarter of 2014, we acquired the Galleria North retail center on Alpha Road across from Galleria Dallas. Unlike Market Street, Galleria North was fully leased at acquisition, but all existing leases were structured at the bottom of the Great Recession and are set to expire in the first three years of the new ownership. While posing a different challenge, we perceive an opportunity at Galleria North to add value to our investment through the structuring of new and renewed leases over the next several years. Additionally, the purchased property is ripe for repositioning as the Far North Dallas submarket continues to rapidly improve and should see a renaissance of sorts with the completion of the new LBJ Freeway in the next several years.

Our investment strategy includes seeking value-add investment opportunities across multiple product types and we have successfully executed value-add investments at numerous properties. We see Market Street and Galleria North as strong assets for our retail portfolio as well as prime opportunities for long term improvement while creating value in the near term for our investor.

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