Real Estate Forum - September 2008

deals & dealmakers

A look at the transactions making the biggest impact on the commercial real estate landscape

development
B. KNIGHTLY TO CONVERT
HISTORIC BREWERY TO MXD

San Antonio—Groundwork is under way for the redevelopment of this city’s historic Lone Star Brewery campus. B. Knightly Development, which recently purchased the property for an undisclosed price, plans to turn the 23-acre site into a mixed-use complex.

For almost two years, the Austin, TX-based company, which specializes in adaptive reuse and infill development, had scouted sites throughout San Antonio, according to its managing partner, Mark Tolley. It was seeking “an adaptive reuse project that had all of the attributes we usually look for, including ample parking, security, a good amenity package and, most importantly, a clean, fully remediated structure in a downtown urban core. This site fit the bill to a tee,” he says.

Built in 1933, the brewery closed 12 years ago after Stroh Brewing Co. moved its operations to Longview, TX. The campus is comprised of a 400,000-sf brewery, containing two beer gardens, a tasting room and an

Development: Did You Know?

Olympic-size pool. The property has 1,100 feet of frontage along the Mission Reach section of the city’s main tourist attraction, Riverwalk. It is the largest remaining development parcel along that stretch of the San Antonio River and is located on a trolley circuit.

In the first stage of the project, the developer will refurbish the pool and transform the brewery into 180 condominium units with

Lone Star Brewery

close to 40,000 sf of ground-floor commercial space, a gym and spa. SaleAMP is charged with marketing the units, which will start at $129,000. Phase one will also include the Bull Brother’s bar and Alamo’s 24,000-sf microbrewery, a 60-key hotel, 4,000 sf of

office and a 5,600-sf music venue, for which the firm is currently discussing branding opportunities with a number of entertainment groups from Austin, TX, Tolley says. The developer is also looking for a boutique hotel operator for the lodging component.

The managing partner anticipates Phase I, with a projected cost of roughly $20 million, will take 28 months to complete. The final stage, he says, may take another two years after that and will include the development of nine acres on the southern side of the site. Seeking LEED Platinum certification, the development will incorporate such green features as a natural rainwater collection system and rooftop photovoltaic solar energy panels.

Having completed the $6-million, 144- unit Silver Ridge apartment homes in January, the brewery redevelopment is B. Knightly’s second project in San Antonio. Tolley touts the market’s resilience in the face of the national economic downturn and sees its long-term potential. “San Antonio is more of a manufacturing, military and com-modity-based economy and those are all things that are chugging along quite nicely,” he says. “The market has a healthy growth rate, low unemployment and a vibrant downtown core that is going through a revitalization.”—Danielle Douglas

Construction has commenced on Genworth Mortgage Insurance Corp.’s 134,152-sf headquarters in Raleigh, NC. When the six-story building is completed on Oct. 1, 2009, the subsidiary of Genworth Financial Inc. will move some 600 employees into the building. Dominion Realty Partners LLC is developing the structure to achieve LEED Silver certification…Atlanta-based NYLO Hotels has debuted its first lodging property in the Northeast with the opening of NYLO Providence/Warwick in Warwick, RI. The 163-room hotel features a full-service restaurant, library, fitness center and 4,000 sf of meeting space. The 82,800 sf, mid-priced hotel runs on 100% renewable energy…A 63-unit, garden-style apartment complex, Monarch Pointe, has opened its doors in Anaheim, CA. Jamboree Housing Corp. developed the property, comprised of 63 units, for low-income families. The project, which received 9% tax credits, is part of the city’s commitment to develop 1,200 affordable housing units in five years…Grosvenor has delivered Hamilton Marketplace, a

90,000-sf shopping center in Novato, CA. Located within the 480-acre planned community of Hamilton, the retail center is anchored by a 55,000-sf Safeway supermarket and includes a Wells Fargo Bank, Verizon Wireless store and Sonoma Latina Grill. The development is partly powered by a solar photovoltaic system…On 28 acres in Cicero, IL, Opus North has begun construction on the 550,000-sf Cicero Business Center. The speculative industrial project will include two buildings: a 260,725-sf facility and a 291,664-sf structure. The buildings are slat-

_NYLO _{Providence/Warwick}ed for completion in early 2009.

Leasing
BURLINGTON COAT FACTORY
TAKES 80,000 SF IN NJ MALL

Ocean Township, NJ—Burlington Coat Factory has inked a 10-year lease for 80,000 sf at Investcorp’s Seaview Square Shopping Center here. The value of the contract was not disclosed.

The retailer was initially set to move into Value City’s former 125,000-sf building at the mall, one of the 24 sites it acquired from the discount chain last October. However, after learning from the landlord that a smaller space was available, Burlington began negotiating a new agreement with Investcorp, says Michael O’Brien, a New York City-based principal of Investcorp’s real estate group.