By Gail Kalinoski
Whitestone REIT plans to develop a six-story building on a 1.4-acre site acquired as part of its $158 million purchase of the BLVD Place mixed-use center in the Galleria/Uptown area of Houston. Plans call for 137,000 square feet of space to be split between two floors of retail and four floors of office in a project estimated to cost $45 million.
The Houston-based REIT bought the 216,944-square-foot urban mixed-use center from developers Wulfe & Co. and Bailard Inc., which had built the property out over 13 years. BLVD Place is 99.2 percent leased with tenants including Whole Foods Market, Frost Bank, True Food Kitchen, North Italia, Regus Workspaces, Newmark Grubb Knight Frank, Virage Capital Management, Pinkberry, Elaine Turner, The Eye Gallery and more.
“Ed Wulfe (Wulfe & Co. chairman & CEO), one of the premier developers in the country, created and developed an award-winning and premier property in the heart of a dynamic upscale marketplace with superb demographics and demand drivers. With the additional upside of the remaining developable land, BLVD Place will continue to epitomize the best-in-class mixed-use lifestyle center offering the ultimate urban experience,” James Mastandrea, Whitestone REIT’s chairman & CEO, said in a prepared statement.
Wulfe & Co. and Bailard were represented by Rusty Tamlyn, Matt Kafka and Trent Agnew of HFF in Houston.
Located at 1800 Post Oak Boulevard in the heart of the upscale Uptown neighborhood, BLVD Place was designed by Jose Palacios with AECOM and SOM in Los Angeles. Wulfe and Bob Sellingsloh, president of Wulfe & Co., came up with the concept 15 years ago for a lifestyle center with a walkable environment connecting restaurants, shops and offices.
Whitestone REIT announced in late April that it was acquiring BLVD Place and the 221,577-square-foot Eldorado Plaza in McKinney, Texas, for a total of $204.6 million.
The REIT paid for BLVD Place with cash and an $80 million mortgage from American General Life Insurance Co. that will mature on July 1, 2027. The fixed-rate, non-recourse loan accrues interest at 3.72 percent per annum. The financing is interest-only with the principal repayable on maturity, according to documents filed by Whitestone REIT with the U.S. Securities and Exchange Commission.
Whitestone REIT closed on the Eldorado Plaza acquisition in early May. The center, located on Interstate 75 at the north end of the Dallas “Platinum Corridor,” is 97 percent leased and is anchored by Trader Joe’s. Other tenants include Starbucks, Henderson Tap House, Christina’s Mexican Restaurant, Bed, Bath and Beyond and Selerix, a software company. It also has redevelopment opportunities and the transaction includes the option to purchase 1.86 acres of developable land to build an additional 24,000 square feet of space. In April, the REIT said it expected to fund the Eldorado Plaza purchase with borrowings from its unsecured credit facility.
“The investment of this high-quality Class A center, in a great location with strong demographics, will expand our retail leasable square feet in the Dallas market by 65 percent, highlighting our ability to efficiently scale our enterprise-level and market-level platforms,” Mastandrea said in a prepared statement.
He also noted the center has stable cash flow from a well-balanced tenant mix as well as upside from future development.“This acquisition demonstrates our ability to continue to source and acquire properties off-market, enabling us to apply our value-add experience and differentiated business model,” Mastandrea added.
The BLVD Place acquisition was Whitestone’s 28th property in the Houston MSA.