the Hollywood

Thanks to the Birmingham News for the article:

Development planned at vacant site on 280

By Dawn Kent — The Birmingham News

September 18, 2009, 5:30AM

Development plans are in the works for a high-profile slice of property along U.S. 280 between Homewood and Mountain Brook, the former site of three popular restaurants.

Shannon-Waltchack Investment Real Estate has a contract to purchase the empty retail strip at 400 Hollywood Blvd. that used to hold PT’s Sports Grill, Mexico Lindo and the Coffee Shoppe. The businesses vacated the area about three years ago to make way for a luxury condo project, Montelena, that never materialized.

Len Shannon, left, and Derek Waltchack of Shannon-Waltchack Investment Real Estate, plan to redevelop a vacant retail site on Hollywood Boulevard, near U.S. 280, Homewood and Mountain Brook. (The Birmingham News / Frank Couch)

 

Firm principals Derek Waltchack and Len Shannon are exploring interest among retailers to shape their plans for the property.

The buildings on the site could be razed to make way for a stand-alone retail use, such as a drugstore a restaurant, or for a four- to five-story office building with retail on the ground level.

The firm also may opt to rehab the existing buildings and bring in new tenants.

Either way, the site offers great potential for whoever ends up on it, Waltchack said.

View the map as a PDF.

The 1½ acres is in the Birmingham city limits but surrounded by the high-end enclaves of Homewood and Mountain Brook. At the same time, it’s visible from busy U.S. 280, which carries about 85,000 vehicles a day.

“It’s the gateway to Mountain Brook and Homewood, smack dab in the middle of those two cities,” Waltchack said. “It’s a once-in-a-generation kind of opportunity.”

Development at the site also will remove an eyesore from the highly-traveled corridor. The buildings that housed the restaurants are still standing, but they have been vandalized and attacked by the elements.

Despite the sluggish economy and a general reticence among retailers to expand, Shannon-Waltchack’s plans are generating a lot of interest.

The firm’s signs have been up on the property for about two weeks, prompting a flood of calls, including those from former tenants, Waltchack said. He also has traveled to Nashville to meet with retail prospects for the site.

Shannon-Waltchack is buying the site from its owners, the Mazer family, and plans to close in three to four months, Waltchack said.

Inkana Development had planned a seven-story, $50 million condo development at the site but pulled the plug on the project in early 2007 amid a slump in the market. The firm, which was partnering with the Mazers to develop the condo building, marketed the units in part by using a 100-foot crane to raise a platform and give prospective owners a 360-degree look at their view if they bought a condo.

Inkana said it didn’t get enough pre-construction contracts to proceed.

Join the conversation below or e-mail Kent at dkent@bhamnews.com.

Our Latest Acquisition

We’re pleased to announce our latest acquisition, a 7,200 SF retail strip center at the front door to the Wal-mart Supercenter in Troy, Alabama.

Typically we’ll look at 75-100 deals before we find one that fits our criteria and that we purchase. We thought it might be helpful to explain to brokers (or whoever is reading our blog) what we’re looking for in a deal and how we found that in this property.

The Troy strip has 4 tenants, Rent-A-Center (RAC), Advance America, Alltel and a billboard ground lease (all national or at least regional credit tenants). The center is only 3.5 years old and was built as a build-to-suit for RAC. Four years ago the southern part of Troy was just starting to grow and therefore rents were low. The original lease had RAC at $11.50 PSF and Advance America at $12.00. After the center was built, the developer signed Alltel at around $16.00 PSF.

After undertaking a market survey of existing centers, we found that the market rate in the area is now $16 to $18 PSF and that there were very few vacancies. We were therefore buying a center with below market rents in an excellent location and the price we paid for the building was less than we could build it for today.  Unfortunately we paid a premium for the in-place rents, but don’t mind doing this as our upside occurs at lease expirations. We prefer this scenario over buying a center with above or at market rents where you get to catch a bullet if your tenants blow out. Finally, we’ll only buy in a small town like Troy if there are clear signs that it is growing and is forecasted to continue to do so.

In Summary, we like:
* Below Market Rents
* Excellent Locations
* Below Replacement Costs
* Growing Markets

Birmingham Business Journal

Please read a very nice article written about our company. One correction however, Len is quoted as saying, “We don’t partner in fees, we share with other investors,” what he meant to say was “we don’t participate in real estate fees” i.e., we let the broker who brought us the deal keep all of the fee. -DW