Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm recently completed the sale of Northwest Crossing Centre, a 180,000-square-foot shopping center shadow-anchored by Target in Houston, Texas. Tenants included in the sale were Burlington, Dollar Tree, Marshalls, Planet Fitness, Hibbett Sports and pOpshelf, and single-tenant pads Chick-fil-A, James Coney Island, Red Lobster and Whataburger.
Hanley Investment Group’s Executive Vice President Kevin Fryman and President Ed Hanley, in association with ParaSell, Inc., represented the seller, USA Properties, Inc. of San Diego, California. The buyer was Wu Properties, based in Houston.
“We utilized cross-marketing from an existing anchored-shopping center that Hanley Investment Group had listed for sale in Houston to identify the buyer for Northwest Crossing Centre,” said Fryman.
“Rising interest rates and the talk of a possible recession had no impact on Wu Properties’ decision-making when acquiring this asset nor their future outlook for the Houston retail market, especially the submarkets the company targets,” Fryman noted. “In fact, while institutional investors have pulled back from acquisitions given the uncertainty, Wu Properties continues to pursue opportunities.”
Fryman continues, “Wu Properties believes that the Houston region will continue to gain jobs and population, driving demand for additional retail space in the Houston area so vacancy rates will remain low. Wu Properties continues to look for additional assets to acquire and it is their intention to do so throughout 2023. The capital they deploy is only dependent upon the assets available to acquire that fit within their acquisition criteria.”
The property is located at 5770 Hollister Street and 13238 Northwest Freeway in Houston and was 94% occupied at the time of the sale. The property, which was over 20 acres, was built in 1993, with the most recent pad building developed in 2010.
Northwest Crossing Centre benefits from excellent visibility from Northwest Fwy/US 290 and the area’s growing population. Currently, the daytime population within a five-mile radius of the shopping center is 328,000 people.
Houston is Texas’ most populous city and the fourth largest city in the U.S. Its 2.3 million citizens are spread among the city and Harris County, with a density of 3,663 people per square mile. The population of the Houston-The Woodlands-Sugar Land metropolitan area in 2021 was estimated to be about 7.21 million people.
In late December, Hanley Investment Group arranged the sale of a 42,800-square-foot Walgreens-anchored shopping center, shadow anchored by Kroger grocery store, which is located in an affluent Houston suburb. The seller was an institutional owner. “The recent sales of these anchored and shadow-anchored shopping centers in the Houston area demonstrate that shopping centers with great fundamentals are still trading at favorable cap rates,” Fryman noted.
“Although rising interest rates are putting pressure on cap rates, those properties with the best tenant mix in the best locations have been impacted the least. It is all down to real estate fundamentals – the location, the tenants and the lease terms,” Fryman said.
Fryman adds, “While many institutional investors are on the sidelines due to market volatility, there are still ample private and family office buyers actively pursuing larger shopping centers that would typically only be available to an institutional buyer.”