Press

October 10 , 2007

Retail Connection, N3 Bridge Development Gap

Retail Connection, N3 Bridge Development Gap


October 10th, 2007 - GlobeSt.com
DALLAS-The Retail Connection LP and N3 Development Ltd. have formed an exclusive alliance to build a portfolio of pad-site projects for clients planning multi-channel rollouts. If projections are on target, at least one dozen projects will be under way within the first year.

Fort Worth-based N3 Development, a subsidiary of United Development Co. in the Netherlands, is better known in the area as the Starbucks guys. And, the development group is no stranger to Dallas-based Retail Connection, which has previously wed tenants to an N3 project in the states. "We're hoping our joint tenants will look to our venture as a preferred developer," William W. McGuire, CEO of N3 Development, tells GlobeSt.com. United Development bought N3 in July as its inroad into the US.

Aside from Starbucks, N3 has developed some Chase Banks due to its long-standing relationship with the Retail Connection. "We want to develop similar relationships with other tenants and that's what we're looking for in this JV," McGuire says.

Alan P. Shor, president and co-chairman of the Retail Connection, says the alliance rounds out his firm's development capabilities without impacting its affiliate, Connected Development, which develops projects in the 200,000-sf to 850,000-sf range. "We pride ourselves on our ability to deliver an end-to-end solution to our retail clients. The one void we have is in the single-tenant pad business," Shor says.

There are a half dozen companies in the specialty practice, but Shor says N3's track record and history were the dealmakers. Since 2003, N3 has finished 74 projects in 14 states, totaling more than $100 million. The 33-staff firm has 50 projects under construction, ranging from 1,700-sf freestanding structures for Starbucks to a 200,000-sf power center.

The Retail Connection-N3 alliance, which will own the finished product, will focus on single-tenant, single-pad site projects with less than 10,000 sf on five-acre or smaller parcels, inside and outside the Texas line. N3 has developed in Florida, Indiana, Louisiana, Missouri, Oklahoma and Texas while the Retail Connection's development arm has concentrated on the Texas markets since its launch in 2003. Each project isn't expected to cost more than $5 million, with the one caveat being the price of the land. "The opportunity here is to roll out a large number of these for a particular retailer," Shor explains.

Shor is playing the pipeline close to his vest, but he did say a project could soon be ready to discuss. "We wouldn't have done this if we didn't think the demand was there. We have a significant number of clients who have the need or shown the desire to grow in a pad-site environment," he says. "I expect in the next 12 months if we didn't have 10 or 12 projects together, I'd be disappointed."

The Retail Connection's black book now totals 164 chains, overwhelmingly weighted with national names that have carried the local firm all across the US with deals. "We provide the connection at every point where retail and real estate come together," says Steven A. Lieberman, CEO and co-chairman. "N3 gives us the opportunity to increase that strength and leverage the services that we provide."