July 6, 2021
CRC Enters Texas Market With Acquisition Of South Plains Crossing in Lubbock For $18.25 Million
Continental Realty Fund V, a $210.8 million private equity Fund, continues to seek retail property acquisition opportunities following 9th retail purchase and 11th asset overall.
BALTIMORE, MD (July 6, 2021) – Continental Realty Corporation (CRC), a Baltimore-based real estate investment and management company, has acquired South Plains Crossing, a 144,241 square foot retail center located in Lubbock, Texas and anchored by Hobby Lobby for $18.25 million. The asset, formerly owned by a joint venture between Atlanta-based RCG Ventures, LLC and New York City-headquartered DRA Advisors LLC was 94% leased with 11 tenants at the time of the acquisition. The transaction represents CRC’s initial entry into the Texas real estate market.
The asset was purchased on behalf of Continental Realty Fund V, L.P., a $210.8 million private equity fund focused on acquiring value-add retail and multifamily properties in the Mid-Atlantic and Southeast regions. This represents the ninth retail property and 11th asset overall acquired by the fund, following the last month’s acquisition of Two Addison Place, a 325-unit multifamily community located at 2 Addison Place near Savannah, Georgia, for $58.35 million. Continental Realty Fund V has acquired approximately $188 million worth of retail property since the beginning of 2020.
Delivered in 1996 and located on approximately 12 acres at 6802 Slide Road, South Plains Crossing is positioned near the signalized intersection of 69th Street and Slide Road, and is comprised of a tenant mix of national and locally-owned retailers. In addition to the 70,000 square foot Hobby Lobby, the center is anchored by Spec’s, a 33,060 square foot store offering wine, beer, spirits and gourmet food items; Vision Mart, a 10,000 square foot store selling eyeglasses and offering eye exams; as well as complementary retailers engaged in the financial, health, food and beauty categories. On-site parking is available for more than 800 vehicles.
South Plains Crossing value proposition
“This off-market transaction was initiated based on our strong relationship with the former ownership group and it represents our third asset acquired from the seller this year. Several strong fundamentals attracted us to South Plains Crossing including extremely high-performing anchor tenants, the center’s strategic position within an economically-diverse and fast-growing region of west Texas, and durable cash flow generated by tenants who have been staples within their respective industries,” stated Josh Dinstein, Senior Vice President, Acquisitions for Continental Realty Corporation. “Nearby economic and traffic generators led by Texas Tech University; major employers in the healthcare, government and hospitality sectors; and more than 7,700 small businesses support our trust in the overall strength and upward trajectory of the entire region. With this acquisition, we have full confidence in our ability to deliver a solid risk-adjusted yield to our investors.”
According to Placer.ai, a market research company that reports on consumer behavior by analyzing visitations in retail stores, the Hobby Lobby store in South Plains Crossing consistently ranks number one in foot traffic in the more than 900-store chain. Additional anchor tenants Spec’s and Vision Mart were also the top-visited stores in their respective chains over the past 12 months.
The average tenancy length for the South Plains Crossing merchant mix is more than 16.5 years. The property’s trade area covers an approximate 75-mile radius and several tenants use South Plains Crossing as an exclusive location to serve this trade area. The submarket has a nearly 95% occupancy rate and has not dipped below 93% since 2007.
More than 205,000 people reside within a five-mile radius of South Plains Crossing, including nearly 100,000 households with an average household income approaching $74,000.
Lubbock recognized as the hub city of Texas
Lubbock is recognized as the “Hub City” for the west Texas region, which includes more than 650,000 people residing within a 26-county area encompassing a 40,000-square mile radius north of the Permian Basin, south of the Texas Panhandle and enveloping eastern New Mexico. Major educational institutions and employers include the 39,000-student Texas Tech University; Covenant Health, considered the region’s largest health system and serving an area from Dallas to Phoenix; University Medical Center; United Supermarkets; AT&T and Texas Tech Health Sciences Center.
With a regional population of nearly 650,000, Lubbock is the 11th largest city in Texas and the second largest west of Interstate 35. Lubbock has experienced a 28% increase in population over the past 20 years, a figure that is expected to further increase by 7% by the end of 2022. According to research conducted by the Texas Workforce Commission, the unemployment rate in Lubbock is 4.9%, compared to the statewide level of 6.7%.
The greater Lubbock area annually produces approximately 4% of the global cotton supply and is the largest contiguous cotton-growing region in the world.
Lubbock ranked 4th best in Smartasset’s list of U.S. cities with the best work-life balance, and a CNBC study placed Lubbock in its top five major metropolitan areas with the best traffic. Both of these rankings are based on information from the Lubbock Economic Development Alliance (LEDA).
Transportation network serving South Plains Crossing and Lubbock
South Plains Crossing is in close proximity to Loop 289 and US Route 62, providing access throughout the Texas panhandle, the greater Lubbock area and Preston Smith International Airport. The airport has more than 60 commercial airport arrivals and departures each day and serves 1.2 million travelers annually, according to the LEDA.
Nearly 85,000 vehicles pass the shopping center each day via Loop 289 and more than 46,000 vehicles drive by via Slide Road.
“Similar to our acquisition of The Shoppes at Sherbrooke in Palm Beach County and The Summit at Towne Lake near Atlanta, we have added a shopping center to our portfolio with dominant anchor tenants and a loyal consumer following in a vibrant sub-market.” stated JM Schapiro, CEO of Continental Realty Corporation. “We believe this asset is the perfect entry point into the Texas region, based on the trade area’s projected growth, placement in the state’s Hub City, and the opportunity to create long-term value to our investors. We intend to remain aggressive in our pursuit of value-add assets throughout the region.”
Continental Realty Corporation (CRC) is focused on acquiring value-add retail and multifamily properties located throughout the Mid-Atlantic and Southeast regions of the United States. Headquartered in Baltimore and founded in 1960, CRC is a full-service commercial real estate and investment company. The privately-owned firm owns and manages a diversified portfolio of retail centers consisting of more than five million square feet of commercial space, as well as nearly 9,000 apartment homes. Positioned in Texas as well as throughout the Mid-Atlantic and Southeast regions as well as Texas, the portfolio‘s value exceeds $2 billion. For additional information, visit www.crcrealty.com.
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