MSD Grabs Dallas Mixed-Use Property

The firm, tech giant Michael Dell’s private investment vehicle, acquired a portion of the Knox District from Sarofim Realty Advisors, walking away with 170,000 square feet of retail space and a 165-unit apartment building.
Pottery Barn, Knox District, Dallas
Pottery Barn, Knox District, Dallas

MSD Capital has snapped up a sizeable segment of the Knox District, a multi-structure mixed-use destination in Dallas. MSD, the private investment firm that exclusively manages the capital of tech giant Michael Dell and his family, acquired 170,000 square feet of retail and a 165-unit apartment structure from Sarofim Realty Advisors.

Sited near some of Dallas’ most affluent neighborhoods, Knox spans 14 square blocks just across from the Katy Trail. The area has come a long way, as noted in a flyer from The Retail Connection LP, one of MSD’s partners on the transaction. “Knox Street District has transformed beyond its furniture and entertainment roots to become known as a shopping district.” A lineup of coveted retailers that includes the likes of lululemon and Kate Spade make Knox “one of the hottest retail markets in Dallas.”

Kate Spade, Knox District, Dallas
Kate Spade, Knox District, Dallas

MSD’s acquisition at Knox encompasses 11 acres and, in addition to the aforementioned shops, features leading retailers including Pottery Barn, Sur La Table and Trader Joe’s. And there’s more to come at the retail locale.

Together with The Retail Connection LP and our other partners, the MSD team looks forward to working with our neighbors to further enhance what already is regarded to be the premier street retail district in Dallas,” Coburn Packard, co-head of MSD Capital’s real estate group, said in a prepared statement.

Digging into Dallas retail

The retail market in the Dallas-Fort Worth Metroplex is thriving and serving as evidence is the area’s record-low vacancy rate—which is forecasted to drop even further to 4.9 percent in 2018—according to a report by real estate services firm Marcus & Millichap. The market offers a perfect storm for buyers.

“Widespread prosperity in the market encourages buyers to target a range of retail properties in a number of areas,” per the report. “Demographic trends are strong throughout the region, supporting healthy fundamentals that attract developers and investors, including new entrants and out-of-state buyers.”

Recent transactions in metropolitan Dallas include Clarion Partners’ acquisition of Leon Capital Group’s Shops at MacArthur Hills, a 75,400-square-foot property in Irving, and DLC Management Corp.’s $170 million purchase of the 1 million-square-foot Village at Allen in Allen.

Images via Google Street View