Harlan Crow’s Crow Holdings scored a blockbuster deal to refinance nearly 200 retail properties across the country, highlighting institutional capital’s attraction to retail real estate.
The size of the deal wasn’t disclosed, but it recapitalized 194 properties making up 4.5 million square feet of retail across 30 states, the Dallas-based firm said in a news release.
Crow’s investment manager Crow Holdings Capital facilitated the deal and brought on an undisclosed partner. The deal builds on a joint venture between Crow Holdings Capital and “a global institutional investor” to purchase convenience-oriented retail in 2023.
The portfolio is 93 percent leased and has generated a 41 percent increase in revenue since 2020, the release said. There are about 2,000 tenant suites in the portfolio with an average size of 2,250 square feet. Crow didn’t disclose the locations of the assets.
The firm’s belief in the durability and strength of “necessity-based” retail is “now further enhanced by the most compelling supply/demand conditions we’ve seen in well over a decade,” Crow Holdings Capital’s Sterling Hillman said.
After the Great Financial Crisis and the proliferation of online retailers like Amazon, industry experts repeatedly predicted the death of retail real estate, causing the development pipeline to essentially dry up. Rather than give retail its final death blow, the pandemic highlighted Americans’ renewed interest in experiential retail.
In Dallas-Fort Worth, retail rents are up from a year ago, increasing from $19.78 per square foot to $20.28 per square foot, according to a recent report from Partners Real Estate. Vacancy rates have remained stable at 4.8 percent.
The market’s stability means it’s able to weather the closure of big-box retailers, like Party City. The space has been gobbled up by experiential users like fitness chains and even bookseller Barnes & Noble, which seems to be having a renaissance.
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