UT Southwestern signed a 15-year lease with The Shops at RedBird for 150,000 square feet, transforming a property once housing a former Sears department store into a modern building able to host oncology, cardiology, neurology and internal medicine services in a much-overlooked part of Dallas.
The property: Peter Brodsky, who owns much of The Shops at RedBird, co-developed the UT Southwestern building at 3450 W. Camp Wisdom Road with Terrence Maiden, CEO and managing partner of Dallas-based Russell Glen. Financing was provided by Veritex Community Bank. The location is expected to help UT Southwestern, with more than 2.9 million patients, better serve its patients in the southern Dallas community.
Why it matters: It's difficult for developers to secure funding south of downtown Dallas, a lesson first-time real estate investor Brodsky learned quickly when he became interested in banking on the city's future. With bankers assuming the southern end of the city is riskier than the northern — and comparatively more affluent — side of Dallas, Brodsky said they are missing out on serving a part of the city that's in dire need of not only high-quality retail and restaurant space but also easy access to good healthcare.
Brokers: Scott Lynn of Caché Realty Capital secured the loan. Frank Mihalopoulos represented the development group in the UT Southwestern lease.
Going deeper: The developer acquired the former Sears department store while simultaneously entering a 15-year lease agreement with UT Southwestern. With a strong credit tenant in tow, Veritex Bank was able to lend the developer $25.6 million in a construction loan to renovate the building. The bank added an additional $3 million loan to further build out the property's infrastructure for the medical center. UT Southwestern signed its lease prior to the pandemic, with construction scheduled for completion in the coming months and the medical center beginning to offer services to patients by this June.
What they're saying: "Many bankers approach the area with a perception that southern Dallas is uniformly riskier than North Dallas," Brodsky told CoStar News. "Even in the face of evidence contradicting those assumptions and a lease with a credit tenant, many banks decline to even discuss the opportunity. That said, Veritex was open-minded about the area and were fact- and data-driven in their analysis." The southern part of Dallas does not have enough medical services to adequately cover the health needs of this part of the city, Brodsky said, adding, "Having a first-class medical facility at RedBird will go a long way toward addressing that deficient. I suspect demand of UT Southwestern services will be high, and the region will grow over the next 15 years, so hopefully their presence at RedBird will continue to expand."
CoStar's Impact Awards highlight the commercial real estate transactions and projects that have transformed their markets over the past year. The winners are chosen by independent panels of industry professionals who work in the markets they judge. A list of judges can be found here and the criteria for selecting winners can be found here.