12-12-2012: TRC Acquires Willowbrook Plaza in Houston, Texas

Bed Bath & Beyond [BBBY] and The Retail Connection [TRC] doing business together is not news.  With 140 plus transactions together, the companies have partnered on everything from penetrating new markets, to powering new projects.  Their most recent collaboration is Willowbrook Plaza in Houston.

BBBY’s lease on their original Houston [and Texas] location at Willowbrook Commons expires January 2014 and, as always, the company looks to optimize the market.  Since the store’s 1998 opening, Bed Bath has grown from 45 stores to over 1,450 locations.  The company has also added four new brands [Harmon, buybuyBABY, Christmas Tree Shoppes, and Cost Plus World Market] to its operation. The company looks to leverage the synergy between its brands, creating a space challenge and opportunity at the same time. BBBY and TRC worked closely with the Willowbrook Commons ownership to accomplish their objectives, however were unable to meet BBBY’s requirements.

As such the BBBY and TRC real estate team went to work doing what they do best and identified a creative solution for their challenge.  The transaction included the two companies partnering to contract for Willowbrook Plaza, negotiating a lease termination and relocation of the 92,000 square foot Finger Furniture space and a lease buyout with Lane Furniture in which the new, right-sized Finger Furniture will open. BBBY subsequently determined that they wished to be a tenant versus the landlord and wanted TRC to acquire the project for them versus with them.  TRC engaged Long Wharf Real Estate Partners to joint venture the property, structured and executed a 92,000 square foot lease with BBBY for its Bed Bath & Beyond, buybuyBABY and Cost Plus World Market concepts in less than 30 days.

“The acquisition of Willowbrook Plaza has been a great collaboration all the way around.  Bed Bath & Beyond was the catalyst and the cure, with Peter Russell BBBY’s Regional Director of Real Estate setting the vision. Our team did an excellent job pulling all together. The effort included David Stukalin [President, TRC Houston] sourcing the opportunity, David Fazio [SVP, TRC Brokerage] coordinating, Stephen Hefner [President, TRC Connected Acquisitions] leading the investment, Long Wharf immediately engaging as our equity partner, as well as other important contributions from our Houston, Dallas, and Austin, brokerage, advisory, acquisitions, asset and construction management teams,” said Steven Lieberman, CEO of The Retail Connection.

“This is going to be an excellent location for Bed Bath and investment for our partners,” said Stukalin.  “The transaction is the seventeenth structured by Stukalin, Lieberman, Fazio and Russell in the greater Houston market,” he added.

“The Retail Connection has been an invaluable partner to BBBY. Their integrated platforms have extended the reach of our real estate program and led to over ten percent of our stores. Willowbrook Plaza is a great example of that capacity and what we have been able to accomplish together,” said Russel.

Willowbrook Plaza is located in Northwest Houston at the intersection of Hwy. 249 and FM 1960, approximately 22 miles from Houston’s CBD. The center was purchased from CBL Properties.

“We are thrilled to be acquiring our first high profile retail shopping center in Houston” said Hefner. “Willowbrook Plaza is at a tremendous retail location and with the significant renovations and remerchandising planned; the center is poised to become a great investment as well as a premier shopping center for the surrounding community.”

Willowbrook Plaza, at 384,556 square feet is currently 73% occupied with a tenant lineup that includes AMC Theaters, Finger Furniture, Sprint, Mattress Firm, Buffalo Wild Wings, Saltgrass Steakhouse, Scottrade, and more. It was constructed by Lincoln Property Company in 1999 on 41 acres, and is located directly across from the super-regional Willowbrook Mall. The Retail Connection plans to reposition the asset with the new Bed Bath & Beyond, buybuyBABY and Cost Plus World Market stores, in addition to major capital improvements to the overall property.

“We are pleased to team with The Retail Connection to purchase one of the best retail opportunities in the Houston marketplace,” said Philip Murphy, Director of Long Wharf Real Estate Partners. “With our collective capital strengths and experience in repositioning retail properties, we will deliver a truly first class shopping experience for the customers of the national, regional, and local tenants that already do, and soon will, call Willowbrook Plaza home,” stated Murphy.

Other individuals involved in the acquisition of the asset included Chad Bradshaw, VP Acquisitions; Doug Nash, CFO; Cheryl Ruff, Director of Property Management for Central Texas; Raney Moon, Assistant Property Manager for Houston; Jonathan Probst, VP Brokerage, and Stephen Tou, VP Brokerage for The Retail Connection.

About The Retail Connection
Founded in 2003, The Retail Connection has seen rapid growth in its full service platform of real estate services, with some of the most successful retailers in the country as its clients and partners. The Retail Connection provides national advisory, tenant representation, project leasing, general brokerage and investment sales, expansion strategy, merchandising plans, property management, construction management, asset management and corporate services, as well as acquisition, development, merchant banking and strategic capital services. The Retail Connection currently represents over 225 retail and restaurant chains and over 25 million square feet of listings, including approximately over three million square feet of its own projects. The company is headquartered in Dallas, with offices in Austin, Houston and San Antonio. Additional information on The Retail Connection, L.P. is available at www.theretailconnection.net.

About Long Wharf Real Estate Partners
Long Wharf Real Estate Partners is a Boston-based private equity real estate manager established in 2011 following the spin-out of the Fidelity Real Estate Group from Fidelity Investments.  Comprised of 27 professionals, Long Wharf utilizes a broad-based value-added investment strategy, targeting opportunities in an array of property sectors and markets across the U.S.  The group has been investing on behalf of institutional clients, including corporate and public pension funds, endowments, foundations and family offices, for over 17 years.

About Bed Bath & Beyond, Inc
Bed Bath & Beyond, Inc., together with a group of subsidiaries, currently operates retail store chains under the names Bed Bath & Beyond, World Market, Cost Plus World Market, World Market Stores, Christmas Tree Shops, Harmon and Harmon Face Values and buybuy BABY. In addition, the Company is a partner in a joint venture which operates retail stores in Mexico under the name “Home & More.” Through its retail stores, the Company sells a wide assortment of domestics merchandise and home furnishings. As of August 25, 2012, the Company had a total of 1,449 stores, including 1,000 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada, 258 stores under the names of World Market, Cost Plus World Market, and World Market Stores, 73 Christmas Tree Shops stores, 71 buybuy BABY stores and 47 stores under the names of Harmon or Harmon Face Values.