Friday, September 26, 2008

Hall, Weitzman team up with new Hall Real Estate Capital

Two of Dallas' most experienced commercial real estate market players are teaming up with a new company to take advantage of tumultuous financial times.

Investor and developer Craig Hall and Herbert Weitzman, who founded the state's largest retail brokerage company, are jointly backing the new Hall Real Estate Capital. The company will match investors with real estate projects and raise capital for property market deals.

Heading the day-to-day operation of the company will be Donna Arp, former chief executive of Realty Capital Partners, who will also be a principal in the firm.

Both Mr. Hall and Mr. Weitzman – who have each been in the real estate business for more than three decades – have a track record of building profits on the ruins of real estate and financial market wrecks.

Mr. Weitzman started his Weitzman Group brokerage firm in 1989 during the depths of the last big real estate market bust.

And after almost losing his shirt during the 1980s savings and loan and commercial property crash, Mr. Hall rebounded with a hugely successful investment company with more than $2 billion in holdings in real estate, oil and gas and other ventures.

Mr. Hall was one of the first investors to make savvy purchases in downtown Dallas and Frisco as the property markets began to recover.

"The current turmoil in the financial markets is creating tremendous opportunity at all different levels in the capital markets, and we believe that now is the right time for investors to look to real estate as an opportunistic area with the potential to deliver superior returns on a risk-reward basis," Mr. Hall said.

With the current credit crunch, dozens of real estate deals have been stalled and potential sales have been put on hold.

New investment ventures are seeking to fill gaps left by more traditional players.

"There are many viable opportunities for investing in real estate right now," said Ms. Arp, who recently departed Realty Capital, which raised more than $80 million for investment this year. She is also a former mayor of Colleyville.

"We believe our investors will receive positive returns based on the experience of our team and the strength of our real estate projects," she said.

While Mr. Hall and Mr. Weitzman have been friends for years, this is the first time the two have formed such a high-profile corporate partnership.

"We've done a few little things together, but nothing like this," Mr. Hall said Thursday. "We are also on each other's company boards."

Mr. Hall said the new firm will buy real estate and debt on properties, plus make loans for projects.

"We can make a more conservative loan today and get a higher interest rate and be very choosey," he said.

Hall Real Estate Capital expects to attract a wide range of outside investors.

"Capital-raising operations today have a lot of opportunities," Mr. Hall said.

"A lot of people are pretty fed up with the volatility of the stock market."

As in the 1980s real estate downturn, he doesn't expect the current financial mess to disappear overnight.

"This will go on for a number of years," Mr. Hall said. "It's different because last time it was worse for commercial real estate.

"But what's worse now than then is the financial markets are likely to be constrained for quite a while."

Mr. Hall is best-known locally for his Hall Office Park in Frisco, which now has more than 2 million square feet of office space.

Weitzman Group and its sister company, Cencor Realty, lease more than 44 million square feet of shopping center space in Texas and manage more than 21 million square feet of retail buildings. The firm is also active in shopping center development.

Mr. Weitzman said real estate developers and owners are looking for new backing.

"I've already had numerous people come to us with projects where their financial partner wants out or there is no one to lend them money," he said. "There is going to have to be a lot of focusing on taking care of problems."

And the Dallas investors are better situated to ride out the situation.

"We are doing fine in Texas," Mr. Weitzman said. "But there is a lot of backsliding in other parts of the country."