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'It Just Made A Lot Of Sense': Behind Weingarten, Fidelis' Rare Property Swap

Weingarten Realty Investors and Fidelis Realty Partners have arranged a rare “property swap” of two retail properties in Houston and Fort Worth as one company exits DFW and the other looks to grow there.

The Village Plaza at Bunker Hill, located at I-10 and Bunker Hill Road in Houston.

Fidelis sold its ownership interest in the Village Plaza at Bunker Hill property in Houston to Weingarten. The project was a joint venture between the two companies. Simultaneously, Fidelis purchased Weingarten’s Overton Park Plaza property in Fort Worth.

Weingarten Senior Vice President Gerald Crump told Bisnow that Overton Park Plaza was the firm’s last remaining retail asset in the Dallas-Fort Worth market. To maximize operational efficiency, Weingarten decided to sell the shopping mall and focus on its holdings in the Houston area, where the company owns or manages about 4M SF of retail.

“[Fidelis] didn't have any ownership interest in the Overton asset prior to this. But we fully owned it and operated that one,” Crump said. “To consolidate our interest down into Houston, and to allow them to grow their portfolio in the DFW market, it just made a lot of sense.”

Crump noted that property swap transactions tend to be fairly rare, because commercial real estate firms don’t always have an alignment of business goals. But in this case, Fidelis was also actively interested in expanding its presence in the Dallas Fort-Worth market.

“The stars kind of aligned; we had a good alignment of interest for each party,” Crump said.

Village Plaza at Bunker Hill is a 491.7K SF, grocery-anchored shopping center at Bunker Hill Road and I-10 in Houston. The property is anchored by H-E-B, PetSmart, Ross, Academy and Burlington.

Overton Park Plaza is a 354K SF power center at 4730 Southwest Loop 820 in Fort Worth. It is anchored by Sprouts Farmers Market, T.J. Maxx, Buy Buy Baby, PetSmart and HomeGoods.

Fidelis built Village Plaza at Bunker Hill in 2008, and Weingarten later became a joint venture partner. Crump said his firm had expressed interest over the years in buying Fidelis’ interest in the property, but those discussions only became more serious over the past year. Fidelis previously handled leasing and property management, which will also be taken over by Weingarten.

“We will continue doing exactly what Fidelis did for many years to focus on making the tenancy better and continuing to keep it fully leased up,” Crump said.

JLL Retail Capital Markets handled the transaction, led by Ryan West, Chris Gerard, Katherine Miller and Adam Roossien. JLL’s Colby Mueck and Clint Coe arranged acquisition financing for Overton Park Plaza on behalf of Fidelis.

“These were two of the largest retail trades of 2020 in the U.S.,” Gerard said in a press release. “Despite all of the challenges the pandemic presented, this ‘swap’ demonstrates the continued investor interest for high-performing, well-located, grocery-anchored retail.”