Commercial Real Estate News and Property Resource

January 19, 2004

Chuck E. Cheese HQ Trades for $7M

IRVING, TX- CEC Entertainment Inc., or Chuck E. Cheese in most circles, has turned over a headquarters deed for $7.4 million to a Boston - New York City joint venture armed with $100 million to acquire net-leased properties. In sync with the sale, CEC signed a 12-year lease for its 16-year address.

Greenstreet/Niosi Capital Partners of New York City and Taurus Investment Holdings of Boston picked up a third deed in back-to-back announcements last week, all coming within four days of the pool's debut to acquire assets in the $5-million to $15-million range. The CEC sale held the distinction of being the largest and the latest to close as well as the only one in Dallas/Fort Worth.

CEC has used the 76,500-sf, class B building at 4441 W. Airport Freeway in Irving as its HQ since 1987, moving in when the multi-tenant building was four years old. Until recently, about 25% of the three-story structure was leased to others, but that's changing as the entertainment corporation gets ready to take over the balance, Eric Jones, a principal with Greenstreet/Niosi, tells GlobeSt.com.

Decisions to buy are based on "the perspective of the tenant to see if it's a strategic asset," Jones explains. CEC showed the asset's importance to the corporate plan by rejecting an opportunity to relocate and instead pumping $1 million into renovations. "They have maintained it in a very institutional quality," he says of an as-is buy with a Dallas/Fort Worth County assessment of about $3.9 million. The structure is positioned on six acres at the crossroads of Airport Freeway and Texas 161, just south of the Dallas/Fort Worth International Airport.

Jones says the Greenstreet/Niosi pool with Taurus will acquire real estate valued at $100 million to $125 million in the next 12 months. The pool's first closing was the fully occupied, 35,250-sf Nashua Village shopping center along Amherst Street in Nashua , NH , which rolled $5.2 million to TJX Cos., a local developer and Panera Bread Co. franchisee. In West Point, MS , the JV paid $3 million to Wal-Mart for a six-year-old store leased for the long term to the retail giant. The JV is targeting single-tenant assets with diversification in product, location, industry/credit rating and lease term. The majority of the portfolio will be non-investment grade credits and intermediate lease lengths.

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