Property features Sam's Club, Spec's and a movie theater
Austin-based Endeavor Real Estate Group, which developed the mixed-use property Southpark Meadows, announced in January that the property's third phase—Southpark Meadows III—hit the market.
Real estate firm CBRE's National Retail Investment Group is marketing the 257,988-square-foot Class A site on 25 acres at 9900 S. I-35 on behalf of Endeavor.
Endeavor is preparing to break ground in March on one of the final pieces of the Southpark Meadows puzzle: a 40,400-square-foot Conn's building in between Spec's and Sam's Club in Phase III, Endeavor principal Will Marsh said.
Southpark Meadows includes about 1.6 million square feet of retail space and is the largest single shopping destination in the Austin metro area, said Chris Gerard, CBRE Group Inc. senior vice president.
"There are other areas like The Domain where you have the other grouping of retail around it, but it's not all specific to The Domain," he said, adding: "Here, this is all one large project."
Shopping center's evolution
Throughout the years, the shopping center has become a regional draw, Marsh said.
"When Southpark Meadows was first being developed by Endeavor, you would see a lot of these national retailers with maybe one location south of the river. And that was in Sunset Valley. They would have two or three or four locations north of the river, so South Austin was really underserved from a retail perspective," Marsh said.
An outdoor amphitheater once stood on the property near what is now The Grove—a stretch of land in Phase II where the development has hosted music and events in the shade of a few live oak trees. From the 1980s to about 2000, Southpark Meadows served as a concert venue, hosting acts including The Police and Crosby, Stills, Nash & Young, according to Henry Gonzalez, grounds supervisor with the South Austin Popular Culture Center.
Gonzalez said he helped build the stage in the early '80s. Promoters wanted a venue bigger than others that were in existence around that time such as the Armadillo World Headquarters and the Austin Opera House, he said.
Gonzalez also saw Willie Nelson's Fourth of July Picnic show featuring Kris Kristofferson, Waylon Jennings, Neil Young and Johnny Cash at Southpark Meadows. It rained the night before, Gonzalez said.
"You couldn't walk without getting mud all over you," he said. "But it was pretty neat because I did like that tour they put together. [The venue] was really wet and sloppy, muddy. And then all of a sudden the clouds suddenly just broke for a second and you heard the trumpet from Johnny Cash's ["Ring of Fire"], and it just went perfect."
Gonzalez said now instead of large concert venues, events such as South by Southwest Music and Media Conferences and Austin City Limits are the trend.
"I mean, [the city] is always changing, and it's always going to get bigger. But the energy [that was] here is still here."
Marsh said he saw Nelson perform at Southpark Meadows in the '90s.
"Like a lot of people in Austin, I attended concerts at the venue and was sad to see it close down," Marsh said.
The land around it was used primarily for residential real estate and agricultural purposes such as cattle grazing, Marsh said.
The amphitheater had already closed before Endeavor's involvement started around 2001 with the purchase of a 35-acre parcel that was not associated with the concert venue site, Marsh said. The firm developed, leased and managed Phase I, more than 283,000 square feet of retail.
"Based on evidence of demand ... [Endeavor] didn't have enough room for everybody, and so we optioned another tract of land [that was] about 60 acres, which included the old concert venue," he said.
In 2005 Endeavor bought a portion of Phase II from the Sanders family that included the amphitheater site, Marsh said. The second phase consisted of more than 850,000 square feet of retail. Endeavor preserved some of the original trees, sold part of the property west of the retail part of the project to residential companies and dedicated some land as park space, Marsh said.
The 516,000-square-foot third phase includes a Cinemark theater, Spec's and Sheplers Western Wear. Excluded from the portion for sale are Sam's Club, Ashley Furniture and buildings along I-35, Gerard said. Larger retailers often purchase the property on which their stores are located.
"It's always a work in progress until you've sold your last piece of land," Marsh said. "Out of the 425 acres total, we're down to our last 15 or so acres remaining."
Future of Southpark Meadows
While Endeavor is selling Phase III, Canada-based company RioCan Real Estate Investment Trust owns and manages the first two phases of Southpark Meadows.
RioCan owns 340 shopping centers in the U.S. and Canada, including 19 in Texas cities, said Oliver Harrison, vice president of asset management. Southpark Meadows Phase I is 100 percent leased, and Phase II is 93.4 percent occupied, he said. It is the company's only property that includes both a Walmart Supercenter and a Super Target.
"It's the biggest shopping center that we own in the United States. ... so it's a bit of a unique property for our portfolio," he said.
Around the time the company purchased the phases in 2010 and 2011, Apple had announced plans to open its second-largest office outside California, he said.
"We liked the fact that [Southpark Meadows] was anchored by two very strong national tenants with a great supporting cast of smaller tenants," he said. "It really fit what we were looking to buy."
Occupancy has improved, he said. Not much will change in 2014, but RioCan plans to start up The Grove's music series in April and hold SXSW and U.S. Grand Prix platinum ticket contests this year, he said.
"[Southpark Meadows] is the largest project on the south side of Austin," Gerard said. "It captures markets as far down as Kyle as consumers."
In Southwest Austin, commercial real estate is a hot commodity, Gerard said.
"It's a very attractive interstate frontage shopping center. ... Somebody from far East or West Austin needing to go to Sam's, they'll drive pretty far out of their way to come shop at Sam's," Gerard said. "While they're doing that, they'll maybe catch a movie at Cinemark or maybe take the kids to GattiTown."