Round Rock retail center sold
Part of La Frontera Village fetches $78.1M from St. Louis real estate firm
One of the Austin area's largest, most successful new retail developments was sold this month for $78.1 million.
Sources say the owners of La Frontera Village sold 550,000 square feet of the project to St. Louis-based National Real Estate Management Co. in a deal that closed Dec. 16.
The Atlanta office of Eastdil Realty LLC had been marketing the property with an asking price of $76 million.
La Frontera Village is the 800,000-square-foot retail portion of the La Frontera development northwest of I-35 and FM 1325 in Round Rock. The sale didn't include occupant-owned portions of the complex, such as Sam's Club, Lowe's Home Improvement Warehouse and 14 of the project's 16 restaurants. Only the Logan's Roadhouse and TGI Friday's restaurants are in leased space that sold along with about 30 mostly occupied retail spaces.
La Frontera Village covers about 115 acres. Anchor stores in the property include Barnes & Noble, Bed Bath and Beyond, Old Navy, Kohl's and Marshall's. Other large retailers in the project include Circuit City, Office Depot, Petco and Pier 1.
Eric Zimmermann at Eastdil's Atlanta office marketed the package and brokered the sale. Zimmermann declines to comment.
The seller was a joint venture of New York's Coventry Real Estate Partners, Beachwood, Ohio-based Developers Diversified Realty Corp. and Prudential Real Estate Advisors of Roseland, N.J.
Executives at the three joint venture companies couldn't be reached for comment.
Investors would be willing to fight for a large, new and relatively stable retail complex like La Frontera Village, says Jerry Quick, president of Quick & Co. Commercial Realty Inc. in Austin.
La Frontera Village is a Class A project, enjoys a great location and has tenants with strong credit, Quick says. Such a low-risk investment is hard to find now, he says.
"There is a shortage of investment-grade properties like that to invest in, that shortage being created by the office markets having difficulties here and in a lot of markets," Quick says.
"Our retail market is very healthy. People are looking around with their investment dollars and not seeing high returns in bonds and CDs, and the stock market has them scared," he says. "A lot of money is chasing real estate with no place to go."
The 328-acre, master-planned La Frontera complex provides 136 acres of office uses, a 300-room Marriott hotel and conference center, 411 high-end apartments in The Enclave at La Frontera, a 16-screen movie theater and a variety of retailers.
The partnership developing La Frontera is 35/45 Investors LP, which features general managers Bill Smalling, Don Martin and William Boecker. Ed Bass, who oversaw redevelopment of downtown Fort Worth, is the primary financial investor.
Martin says the project is a money maker for tenants, a trait he says makes The Village at La Frontera a desirable acquisition for real estate investors.
John Wooley, president and CEO of Schlotzsky's Inc., says the Austin company's store in La Frontera Village is one of the top-grossing shops in the restaurant chain.
"It usually ranks fourth or fifth out of 650-plus stores — it's consistently in the top five," Wooley says. He attributes much of that sales volume to location and describes La Frontera Village as "a very strong trade area."
SOURCE: www.bizjournals.com 12/20/2002