My secret love: the neighborhood retail center

Oltorf strip center 1
It doesn’t look like much at the moment, but this new little strip center is coming along at a prime intersection in South Austin.

Massive real estate projects like The Domain and The Independent always grab peoples’ attention. And of course, they should. Big development touches most everyone in a city. It’s the backdrop and sometimes the muse of our collective lifestyle.

Even so, the modest, sometimes minuscule, real estate projects  charm me more — the outwardly bland little retail strip center that hardly anyone ever notices, for example.

I started noticing such ordinary developments shortly after becoming a real estate reporter at the Denver Business Journal. One such property was right around the corner from my house, so I called the developer and asked a few naive questions.

Are they hard to do? How profitable are they? Do you get any gratification from building something so, well, humdrum.

His exuberance surprised me. Of course he was gratified. He’d made a small fortune building simple strip centers and leasing them up. He enjoyed cultivating relationships with retailers and service providers — some which had become national chains. He could count on repeat business as he developed new strip centers in other reaches of Denver’s metro area.

With this in mind, I’ve been watching the little project under construction at the southwest corner of South First and Oltorf streets. For starters that’s an outstanding location in 78704 — South Austin’s celebrated ZIP Code.

My former commute from Circle C Ranch to Downtown Austin took me through that intersection almost every day for two years. The northeast corner had been redeveloped as a Starbucks. You know what that means. Get in the neighborhood ASAP!

Surely something good was in store for the property kitty-corner from Starbucks. One day I noticed a for-sale sign go up in front of the property, which once housed a pawn shop.

Mental note made: “If I win the lottery this week, be sure and buy this property.”

My daydream game went on for weeks.

Still waiting to find that winning lottery ticket on the pavement near my car, I noticed that “For Sale” sign changed to “For Lease” — with John Heffington and Michael Bullard of CBRE handling the listing. New construction soon was underway.

Here is the 4-1-1 on the retail space: About 8,400 square feet divisible. Rent prices are pretty breathtaking, but this is after all South Austin — $32 per square foot. I bet that is close to double what it was six or seven years ago.

2400 S First Rendering provided by CBRE
Here’s what the finished site will resemble. (Rendering provided by CBRE)

While searching public records I discovered that the property is owned by a Texas couple, who purchased it in 2007. It appears they decided to redevelop it in 2017 after creating a limited liability corporation.

To my delight I uncovered another document not usually on file.

Sherwin Williams, the Cleveland-based paint company, has signed a 10-year lease with two 5-year options for at least part of the space.

Most recently the property was valued at about $1.2 million for tax purposes. The strip center was originally built in 1955. The remodel is valued at $530,000, development records show.

The LLC obtained a loan from PlainsCapital Bank for $2,450,000, according to public documents. And PlainsCapital has placed a bison statue out front with the company name. Nice touch.

This may not be the sexiest deal in town, but I bet it’s a solid investment. With Sherwin Williams — a solid national tenant —already in queue, I bet the investors are tickled pink. I’m green with envy.

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