Costco Wholesale Corp. is the highest bidder for a 10-story office building adjacent to one of its largest stores in Dallas, the latest in a series of similar deals by the retail giant across the country. be.
The 198,374-square-foot office building known as North Central Plaza I at 12655 North Central Expressway is being auctioned off by real estate firm Hartman SPE, which is in bankruptcy proceedings. The property owners asked the U.S. Bankruptcy Court for Delaware to approve the $14.25 million sale to Costco.
This is not the first time the wholesale club has purchased an office building. Over the past several years, Costco has made strategic acquisitions of similar properties, including purchasing the former Hertz Corporation office building at 14501 Quail Springs Parkway in Oklahoma City for its new operations center. In June, Costco also purchased a small, 1980s-vintage office building at 7375 Boston Blvd. Located in Springfield, Virginia, adjacent to the retail center at 7373 Boston Blvd. Possibility to expand your business.
The next highest bidder for the Dallas office property bid less than $12.1 million, according to documents filed in court. Hartman SPE lawyers have until December 13th at 3pm CST to file closing documents and object to the potential sale, which must be approved by the bankruptcy judge overseeing the case. He warned the people that.
Costco did not immediately respond to an interview request from Coster News.
Robert “Bob” Young, executive managing director of Dallas-based retail real estate brokerage firm Weitzman, who was not involved in the transaction, said the retailer already has plans for the property. He said it was highly likely. Costco is often looking for nearby properties to build gas stations or fulfillment centers.
“That continues with Costco, and if you look at their footprint and their business, if there's potential space in an adjacent store, they've been known to buy it,” Young said. “This is a reminder that your best prospects and buyers are your neighbors and to always be aware of who owns the properties adjacent to your property.”
Mike Geisler, founding president and managing partner of Dallas-based retail brokerage firm Venture Commercial, who was also not involved in the sale, said he believes it won't be long before Costco becomes an office landlord. I expected it.
“They'll probably tear it down,” Geisler surmised. “Everyone is doing a lot of things in fulfillment centers right now, there’s a lot of experimentation going on, and it’s only natural that we want to offer more convenience to our customers.”
He added: “Retailers are poor landlords. We find that they typically want to stick to their core business of being a retailer and want to get out of the office leases in their buildings as soon as possible. ” he added.
The building's market has traditionally been attractive to companies seeking a home for back-office operations, such as insurance and financial services companies. Geisler said many people are starting to rethink the way they do business. About 72% of the office building is leased with the largest tenants including Zion Oil & Gas, Move It Storage and Cadence Bank, according to CoStar data.
Geisler said the early 1980s-vintage building would likely need quite a few updates, which could be the reason for the price.
Moody Younger, co-founder of Dallas-based real estate services firm Younger Partners, said land prices for office buildings that are past their prime are declining because many cannot be easily converted to more productive uses. He said it is not uncommon for the property to be sold. , apartment etc.
The proposed sale of the North Dallas office building is part of a larger portfolio sale by Hartman SPE, a subsidiary of Silver Star Property REIT. Hartman filed for Chapter 11 bankruptcy protection to sell its office, retail and industrial portfolio, ultimately valued at $400 million. Pay off $217 million in debt.
This week, U.S. Bankruptcy Court Judge Mary Walrath granted Hartman SPE permission to sell Gateway Tower, a more than 260,000-square-foot office building. 8111 Lyndon B. Johnson Freeway From Dallas to Hamilton Commercial. The total value of the contract was more than $14.1 million, according to court records. Other Houston properties were also approved for sale by a bankruptcy judge. The property is included below.
- 3-story, 42,621 square foot office building 15840 FM529 In Houston, sold to Winthrop Realty Group for more than $3.1 million.
- 3-story, 51,035 square foot office building 5870 Highway 6 North In Houston, sold to Winthrop Realty Group for $2.86 million.
