Property
Archives
Dallas investors buy big retail power center in Norman, Oklahoma
NORMAN — University Town Center in Norman is the most recent major shopping center to be sold off by national institutional owners, which are leaving the Oklahoma City area about as fast as they started arriving a decade ago.
Indianapolis-based Kite Realty Group sold the 417,515-square-foot shopping center last week to Rainier Cos. in Dallas for $63 million, Cleveland County records show. Dallas-based Disney Investment Group lined up the buyer and brokered the sale.
University Town Center fronts Interstate 35 with national tenants including Kohl’s, Academy Sports, TJ Maxx, HomeGoods, Michaels, Ulta and others in a tight retail corridor that also includes Super Target, Ashley Furniture and Crest Fresh Market. Oklahoma City’s Sooner Investments developed it in 2009 with partner Collett & Associates of Charlotte, North Carolina.
Kite got University Town Center, part of the 1.1-million-square-foot University North Park, and other metro-area retail properties in 2014 with acquisition of the entire portfolio of Chicago-based Inland Diversified Real Estate Trust Inc. in a $2.1 billion stock transaction. Inland bought the property from Sooner Investment and its partner in 2011.
Kite still owns several shopping centers in the Oklahoma City area, but probably not for long, said Jim Parrack, senior vice president and retail property specialist at Price Edwards & Co.
The value placed on University Town Center by Kite and Inland for the 2014 acquisition is unknown because it was a stock transaction, not a real estate sale. But Parrack said retail values are way past the peaks that attracted real estate investment trusts and other institutional investors 10 years ago.
Kite is “exiting the market,” he said. “It is also marketing Shops at Moore and Silver Springs Crossing. It is expected that they will ultimately sell Belle Isle Station, as well.”
Kite isn’t alone in the exodus.
InvenTrust Properties Corp., based in Chicago, sold its last Oklahoma City property, Rockwell Plaza, in June for $20.5 million to Atlanta-based RCG Ventures, Parrack said. InVenTrust, formerly Inland Real Estate Acquisitions, paid $31 million for Rockwell Plaza in late 2012.
“InvenTrust at one time owned five large power centers here,” Parrack said. “These institutional investors exiting the market are driven by a combination of factors, including the lifecycle of the investment necessitating a return of funds to investors but also, a desire by institutions to exit secondary markets and return to their core markets.”
Capitalization rates on the sales have been risen — reflecting lower value — “due to the lack of institutional investors and uncertainty in the retail market,” he said. “Institutional investors will come back when retail stabilizes, but for now, prices have come down and opened the door for more local and regional buyers.”