Business parks could go for $150M; Zimmer-led offering is 'testing the market'

Southlake Technology Park in Lenexa is on the market as part of a 1.8 million-square-foot portfolio being offered by a group that includes principals of Zimmer Real Estate Services LC.

David Zimmer, president of the real estate brokerage, which also manages and leases Southlake, said the ownership group is "testing the market to see if it treats us as it's treated other people."

Lenexa Industrial Park Inc., which also includes five other shareholders, was established in 1965.

Zimmer said the owners haven't taken any profits from the corporation during that time.

Southlake includes more than 1.4 million square feet of office and technology space. Almost a million square feet is being offered for sale; the rest is owned by others. Also part of the offering package are Lenexa Industrial Park, whose construction began in the mid-1960s, the Belletower office building near the Country Club Plaza and an industrial building in North Kansas City.

Brokers not involved with the offering said the package could go for $150 million, though the diversity of the package complicates pricing.

Zimmer said no timetable has been set for accepting offers. Zimmer Real Estate began marketing the portfolio about 45 days ago, he said.

Mike Klamm, a broker with Colliers Turley Martin Tucker, said institutional investors remain interested in Kansas City after looking at marquee listings such as Corporate Woods, the Overland Park office park that sold in 2006. Uncertainty in the capital market caused by subprime lenders' troubles hasn't stifled buyers' appetite, Klamm said.

"The real question," he said, "is will things be better or worse six months from now? Will interest rates drop? Will lending requirements ease? A lot of players need to decide if this is the time to pull the trigger."

David Hinchman of CB Richard Ellis Group Inc. said instability in the debt markets favors all-cash buyers. Larger investors tend to be less debt reliant, Hinchman said.

The diversity of property being sold could prompt bidders to make offers for parts of the portfolio, he said.

Southlake's tenants include freightquote.com . In late 2005, the company said its headquarters would consolidate at Southlake. The fast-growing Web-based freight manager ranks No. 28 on the Kansas City Business Journal's list of the Top 150 Area Private Companies. Applebee's International Inc. plans to open a headquarters this year in Southlake on property the restaurant chain operator bought in 2005.

The park's energy-efficient design positions it to capitalize on the environmentally responsible "green" movement.

Ken Jaggers, managing director of Integra Realty Resources' Westwood office, said the technology park has lived up to its name, drawing tenants that seek specialized space for research and development.

Blake Schreck, the Lenexa Chamber of Commerce's president, said Southlake "helped put Lenexa on the map."

"It's given us the opportunity to compete with Overland Park," Schreck said. "It's really given us an iconic intersection at College and Renner (boulevards)."

A fifth of Southlake -- 60 acres -- remains undeveloped.