HARKER HEIGHTS — Direct Development won’t be changing its operations at the 82-acre Market Heights shopping center despite selling the property to a trust earlier this month.
Cole Capital purchased the developer’s portions of Market Heights, about 412,645 square feet of shopping space, in early December. But Direct Development, which opened the center in 2007, will continue to manage the property.
“It was a typical market transaction,” said David Watson, managing principal of the Dallas-based Direct Development. “We have developed the asset, and it is fully leased and stabilized.”
The move to sell the shopping center is one the company typically does after the majority of the property becomes stabilized, Watson said.
He couldn’t discuss the price of the transaction, but according to the Bell County Tax Appraisal District, the properties formerly owned by the company were estimated at $25.1 million for taxing purposes.
“The real estate investment trust has been a very consistent source for buyers of this type of product,” Watson said. “We are in the business of building up the income, and once the development is built, we typically exit.”
The property has gone from a development opportunity to a passive investment, he said.
Watson said the community helped make the sale easy.
“There was quite a bit of interest in this asset,” he said. “This was viewed as a great asset in a great community. This asset sailed through some really rough seas based on what was happening on the national scene.”
Despite the sale, Harker Heights will finish paying the developer the city’s incentive that helped bring the shopping center to town.
With the final payment approaching in February, Direct Development will have collected about $3 million in tax rebates, said City Manager Steve Carpenter. That funding comes from half of the center’s property tax for the year, and a half-cent of sales taxes the center generated.
“The agreement was for five years after the commencement day or $3 million, whichever came first,” Carpenter said.
Watson said the company’s decision to sell had nothing to do with the payments ending.
Development to continue
Portions of the property remain targeted for development of additional structures, Watson said.
Direct Development has seen enough interest to finish building at Market Heights, but he said stores with interest in the site weren’t “in the best interest of the center.”
New operations should benefit the establishments located at the site and not change the demographics of those visiting the center, he said.
Direct Development hopes to finish building the remaining sites soon, Watson said.