Investing in Extreme Makeovers
The slow recovery is leading many developers to examine growth alternatives to new development. Consider, for example, Fort Worth, Texas-based Trademark Property Co.’s idea: invest in distressed properties with excellent real estate and redevelop into new and ambitious concepts. Examples include The Shops at Napa Center in Napa, Calif., and Victory Park in Dallas.
The Shops at Napa Center
In 2013, Trademark formed a joint venture with Zapolski Real Estate, which has offices in Napa, Calif., and Durham, N.C., to redevelop the former Napa Town Center.
Once a bustling retail district, the Town Center’s stores have mostly closed. Only eight of 24 storefronts remain occupied. The former owner emptied the center as leases rolled, angling for a buyer that wanted to redevelop with a new concept.
Trademark and Zapolski like the real estate. For years, Napa was one among many small towns filtering tourists into Napa Valley wineries. That is changing.
“Downtown Napa is fast becoming the hub of a major tourism and visitor destination comparable to Carmel, Palm Springs/Desert and Santa Barbara,” said Terry Montesi, Trademark’s CEO. “What Napa Valley lacks today is a convenient concentration of walkable, upscale shops, dining venues and Napa lifestyle merchants.
“Napa Center will deliver the critical mass of upscale shop ping and dining that the market needs — plus a new 188-room Four-Star+ boutique hotel, soon to be the tallest building in Napa — with a rooftop bar.
“Napa Center will serve an affluent and underserved residential trade area and capture retail sales currently leaving the market, along with the 4.5 million tourists currently visiting Napa overnight.”
Victory Park in Dallas
In the spring of 2012, Trademark Property Co. partnered with Orlando, Fla.-based Estein & Associates USA, which manages a German real estate investment fund that owns Victory Park in uptown Dallas, to redevelop the retail component of the 75-acre master-planned, mixed-use property near the American Airlines Center, the Arts District, Uptown, the newly opened Perot Museum of Nature and Science, Klyde Warren Park and other Dallas attractions.
The original developer broke ground on the property in 2001, completing 550,000 sq. ft. of Class A office space, which is 95% leased. A 252-room W Dallas Hotel is also up and running.
But the retail faltered, and residential development stalled. Today, both are getting back on track. “New residential development is on fire,” Montesi said. “Three residential projects are under construction, and a fourth residential developer has purchased land with plans to commence construction in 2014.”
The Trademark joint venture retail project includes a new 75,000-sq.-ft. retail-office building, opening in late 2014 across from the W.
Trademark is also reworking existing retail. “We’re working on the streets, sidewalks, parking, public spaces, graphics, storefronts, public spaces and other components of the property,” Montesi said. “We’re also planning retail, entertainment, multi-family and hotel components to the south. These buildings will complete the new sustainable Victory Park retail, dining and entertainment district.”
The makeover redevelopment strategy for both Napa Center and Victory Park will reposition two excellent retail locations and bring each closer to achieving its full potential.