Tuesday, June 17, 2008

Katy Railroad Building Hits Sales Block

A Las Vegas-based partnership, readying the stage for a market exit, is putting the CBD's historic Katy Railroad Building up for sale in a three-property portfolio. Tagged at $15 million, the value-add package includes Park Plaza and Colony Park shopping center.

The 57,500-sf Katy Building at 701 Commerce St. was built in 1914 on a 7,500-sf tract, making it one of the oldest office buildings still standing in the Downtown. The preference is a take all or none scenario although severing the retail from the two office buildings remains an option, says Sary Benzvi, owner of Select Real Estate Group in Dallas.

Benzvi tells GlobeSt.com that the sales pitch will begin in two weeks, with the call for offers in 60 days. His says his plan is to target predominately local private investors who are familiar with the locations and value-add prospects for the separate submarkets. The 120,000-sf Park Plaza sits at 13111 N. Central Expressway on a 1.6-acre corner at a freeway ramp and kitty-corner from a proposed medical office complex. The 54,000-sf shopping center is situated on 0.8 acres at 5000 Main St. in the Colony, north of Dallas.

The trio has been paced through $3 million of renovations since Katy Building LP bought them in the past four years. "They felt their investment has matured and they want to liquidate the Dallas holdings," Benzvi explains.

As the assets' leasing and management point man, Benzvi points out the properties' dynamics vary, but the value-add shares a common thread--filling the open space. The Katy Building is 63% leased; Park Plaza, 43%; and Colony Park, 90%.

Benzvi admits the Katy Building is up against stiff leasing competition, sitting at the gateway to the historic West End shops and restaurants, where foot traffic has declined as nearby Victory continues to corner its market share. But, he points out the asset also is close to the city's convention center hotel site and courthouse, both of which hold added promise for the eight-story building.

"The market is not easy, but transactions are going through," Benzvi says, "and business is going on. This is an opportunity."