Tuesday, January 29, 2013
Investors buy up big chunk of Henderson Avenue retail district in East Dallas
During the last decade, East Dallas’ busy Henderson Avenue has transformed from a sleepy neighborhood business strip to one of the region’s most popular restaurant and entertainment districts.
Following the flood of trendy eateries and crowded watering holes, two investors have now bought up the largest share of the Henderson corridor between U.S. Highway 75 and Ross Avenue.
CIM Group and Open Realty Advisors said Monday that they have purchased 28 buildings with 130,000 square feet of retail, restaurant and commercial space on both sides of Henderson. The sale also included some vacant lots.
The properties — which add up to about 14 acres of buildings and land — were purchased from Dallas’ Andres family.
Terms of the sale were not disclosed. But real estate brokers say the properties fetched more than $50 million.
The deal to sell the Henderson properties has been in the works for several months.
Other than a brief announcement, the new owners would not provide any other details about their plans for the properties or agree to an interview.
“CIM Group and Open Realty Advisors plan to continue to grow the unique mix of retail tenants along the Henderson Avenue corridor,” the buyers said in a statement. “CIM Group identified the Dallas metropolitan area as possessing the attributes that fit the firm’s urban investment strategy, and it is an active investor in other markets in the state.”
Los Angeles-based CIM Group and its partner, Dallas’ Open Realty Advisors, are involved in other urban commercial property projects.
CIM Group owns the Knoxbridge apartment just west of Henderson.
And Open Realty is involved in retail developments in suburban Houston, in Las Vegas and Atlanta.
‘Looking at the potential’
Dallas retail real estate experts say they expect that the new owners will continue with the redevelopment of Henderson that the Andres family started almost a decade ago.
“The reason why they are paying a premium for the real estate is they are looking at the potential relative to what’s happened at Knox Street,” said Mickey Ashmore, CEO of Dallas’ United Commercial Realty.
“When you look at the sales per square foot on Knox Street, there has always been the feeling that Henderson is undervalued.
“I think it’s got great potential — no question about it.”
The buildings CIM Group and Open Realty bought already are home to some of Dallas’ best known bars and restaurants, including Fireside Pies, the Hacienda, Capitol Pub and Barcadia Bar and Grill.
The grocery building occupied by Sprouts Farmers Market also was included in the sale.
Dallas’ Metropolitan Capital Advisors brokered the transactions.
The Andres family started buying real estate along Henderson in the late 1950s. And over the years Andres Properties became the largest owner along the street.
Beginning in the early 2000s, Andres Properties began remodeling some of its buildings for new restaurants and bars. The Henderson landlord improved its properties over several years.
“This didn’t happen overnight,” Marc Andres of Andres Properties said in a 2006 interview. “It has happened 50 feet at a time.”
Andres officials were unavailable Monday to comment on the sale.
“They have taken it a long way, but now is the time for someone new to come in,” said Ashmore. “I would think you have to add density — which would mean some mixed-use — and add structured parking.
“They need to create more storefronts.”
To make those changes, Ashmore said, the investors will need to work closely with neighborhood groups, which are already struggling with increased traffic and parking issues caused by the success of the Henderson corridor.
High price a good reflection
Bob Young, managing director at Dallas-based Weitzman Group, said the high price the investors paid for the Henderson properties reflects well on the Dallas market.
“This is just another confirmation that everything inside the loop — close-in stuff — is hot,” Young said. “We’ve known it, intuitively, but this really confirms it.”
He predicts the area will attract more food-related businesses and startup retailers that want an “edgy” urban location.
Open Realty’s clients include Apple, J. Crew, Restoration Hardware and the House of Blues.
“I’m not saying Henderson tomorrow will be Knox, but to mirror some of that success can be cool,” Young said.
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