It’s almost impossible to underestimate the significance of sale of the Lakewood Shopping Center, which was bought by Lincoln Property Company this month. It’s important not just to those of us who live around here, but it may be a clue as to what will happen to retail development in the rest of Dallas — and even in the rest of the country.
Steve Brown at Dallas’ Only Daily Newspaper had a nice bit of reporting yesterday, digging up the details of the sale (though his implication that Matt’s imminent departure was related to the sale was wrong — the Matt’s part of the center is under different ownership and was not involved in the sale). Lincoln, which owns The Village apartment empire, bought the northeast portion of the center, centered around the Dixie House, from the Corrigan family, which built it and has owned it for more than 70 years.
Which, in real estate terms, is forever. And properties like that just aren’t sold. They’re like the Cowboys — can you imagine Jerry Jones selling the team unless something really important happened to force his hand?
Having said that, the immediate issue is not so much why the center was sold, but what the new ownership means. First, Corrigan could have done a lot worse than Lincoln. The company, unlike so many other property developers and managers in Dallas, takes a long-term view of its assets, and doesn’t necessarily manage them to goose up revenue so they can be flipped to a new owner. That means they’ll likely look for quality tenants instead of dollar stores and title loan companies.
Before the recession, it was easy to make money in commercial real estate by buying and selling property like a game of Monopoly. That’s still going to happen, but it’s going to be more difficult to do. The recession has apparently changed the way Americans shop and spend money, which means the demand for retail space has significantly decreased, and prices and rents for strip centers have followed. That Dallas retail is notoriously overbuilt will only depress prices more.
So how will people make money in commercial real estate in this brave new world? They’ll find quality properties, like Lakewood, and manage them to make money. Yes, this is a very old-fashioned concept, but there are signs that it is already happening, and not just with the Lincoln purchase. The new owners of Hillside Village and Casa Linda seem to be doing just that, and with some success — especially since those centers have had a variety of owners over the past couple of decades who flipped them to make their money.
All of which is good for us. It means we’ll get property owners who will bring in tenants who will fit the community, and not tenants who are only there because they can pay the rent. There are no guarantees, of course, because this commercial real estate. But this may well be the beginning of a trend that will make Lakewood and East Dallas even better than it already is.
Click to sign up for the Advocate's weekly news digest and be the first to know what’s happening in Lakewood/East Dallas.