Rice's Retail Portfolio Bulks Up with Urban Outfitters
Rice University is amassing real estate—right on the heels of purchasing the Village Arcade, it just bought the Urban Outfitters in Rice Village. (They want to be known for offering a quality education and the best fall fashion.)
Marcus & Millichap first VP Jerry Goldstein repped the seller, a family that has owned the building for 60 years. Back then, it was a Craig’s Clothing. Now, the 15k SF building is a landmark location for Urban Outfitter’s nationally. Jerry has worked with the seller for eight years, waiting to pull the trigger on a disposition. (Jerry says he felt prices were at or near a high for this type of asset, and rent growth and nearby residential development made it the right time.) Despite a relatively low cap rate, which put many investors out, Jerry says it got strong institutional interest from out-of-towners because Rice Village is Houston’s most secure retail submarket.
Rice aggressively came in with the highest bid to add to its Village portfolio. Jerry says he was thrilled to sell a Rice Village building—in all his years in the biz, he’d never done that. (And few people have, transactions there are pretty rare.) And it’s one of the very few walkable urban infill retail projects around town. Tag on all the activity in the area (both within the Village—including the success of Hanover’s multifamily project—and in nearby neighborhoods like the Med Center), and he says it was a milestone deal. It’s a big milestone year for Jerry—he’s already closed 30% more than 2013, which was itself a good year.
Rice will probably upgrade the Urban Outfitter’s building, as it plans to do with the 193k SF Village Arcade. (The Village has looked much the same since the early ‘90s, when Urban Outfitters joined the tenant mix.) Trademark Property managing director Tommy Miller (whose firm was chosen by Rice to lease, manage, and renovate the Village Arcade) shared the Village's appeal: He says Houston is the next great US gateway market, and Rice Village is the only authentic urban district in the city with real history (it dates back to the '20s), heart and soul, and a street grid to build on.