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VOL. 123 | NO. 196 | Tuesday, October 7, 2008

Interface Properties Re-Enters Memphis Market

By Eric Smith

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A Florida development company absent from the Memphis market for the past few years is returning to the area with plans to develop outparcels at a Collierville retail center and a Germantown hotel.

Interface Properties Inc., based in Boca Raton, Fla., first will bring an 11,600-square-foot, multi-tenant building to the Houston Levee Galleria, a 26-acre mixed-used development on the southeast corner of Houston Levee Road and Poplar Avenue. Later plans call for developing outparcels at the Hyatt Place hotel at Winchester and Forest Hill-Irene roads in Germantown.

The Collierville building will be anchored by a Panera Bread store, one of 12 planned for the Memphis, West Tennessee and North Mississippi regions, the Richmond Heights, Mo.-based company announced earlier this year.

Calls to Rick Postle, owner of Panera Bread’s Memphis franchise, were not returned by press time.

But Panera will occupy 4,500 square feet in the Houston Levee Galleria outparcel, said Bruce Levy, partner at Interface Properties, which helped bring Office Depot to Memphis by serving as preferred developer for the office supply giant.

The remaining space in the Houston Levee Galleria outparcel building is available for lease, for either one or multiple tenants, said Levy, adding that the busy corner of Poplar and Houston Levee is a highly visible locale for any retail or service provider not yet in that submarket.

“Most of that corner is completely leased, so anybody that hasn’t made it in yet, I think it’s their last shot at coming in to that corner,” Levy said.

Smooth sailing – and feathers

Operating locally as Interface Houston Levee LLC, Interface Properties paid $1.6 million for the outparcel, a 1.37-acre site that sits on the northwest corner of the property. The Shelby County Assessor of Property’s 2008 appraisal of the land is $717,500, and the site is zoned commercial.

The outparcel is due north of a BackYard Burgers restaurant and a First Citizens National Bank branch. The main Houston Levee Galleria center includes Newk’s Express Café, Jim’s Place Grill and Gould’s Day Spa and Salon, among others.

The seller was Houston Levee Galleria Joint Venture; one of its partners is the center’s developer, Germantown-based McNeill Investment Co. Spence Ray, executive vice president of McNeill Investment, said one 5-acre parcel remains for sale on the site, preferably for an office building.

The transaction also included an assignment of rents and leases, and Levy said Germantown-based Trezevant Realty Corp. will lease the property for Interface.

Interface Houston Levee financed the purchase with a $2.8 million construction loan from Northern Trust NA. With site plan approval granted by the Collierville planning commission last week and plans slated to go before the design review board Oct. 23, Levy said Interface should begin the six-month construction on the building in early 2009.

Memphis-based Fisher & Arnold Inc. is architect for the project, and Interface will open bidding for the general contract soon, Levy said. The building will resemble the design criteria of the other Houston Levee Galleria buildings, Levy noted, an important consideration for developing and building in the center.

“We’re going to definitely emulate and stay within the design that’s currently existing there,” he said. “We don’t want to ruffle anyone’s feathers.”

More to come

The Houston Levee Galleria isn’t the only plan under Interface Properties’ return to Memphis. The company soon will begin developing the outparcels for the 127-room Hyatt Place hotel being built on 10.8 acres at the southeast corner of Winchester and Forest Hill-Irene roads in Germantown.

The hotel is being built by Silver Cos., also of Boca Raton and a partner with Interface Properties in this joint venture. Marvin Bolinger of the Silver Cos. told The Daily News earlier this year that the hotel will be on the southeast portion of the parcel, with four outparcels on the north side.?

Plans call for a 20,000-square-foot building on the front of the property to house a restaurant or two and maybe a shop, Bolinger said, plus two other outparcels that aren’t yet designated.

Levy said Interface Properties is preparing the ground and getting the pads ready for development, as well as marketing those outparcels for lease. The company will announce tenants when contracts are inked. The Hyatt Place hotel is expected to be completed by spring or summer 2009.

Levy said landing back in Memphis with outparcels in the two suburbs is a boon for the company – and they might not be the only projects Interface has in store for the area.

“Germantown and Collierville are both growing markets. Basically we just want to be part of the growth commercially,” Levy said. “We’re going to keep trying to find more deals in Memphis and keep growing.”

PROPERTY SALES 101 603 9,602
MORTGAGES 92 538 10,616
BUILDING PERMITS 215 1,282 20,958
BANKRUPTCIES 51 408 6,108