Louisville Real Estate News

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Icon sells $70 million in assets
Development firm plans additional projects

By John R. Karman III

The investors in Icon Properties LLC, a Louisville-based real estate development and property management company, have divested themselves of nearly $70 million in assets since late last summer and are positioning the firm for another round of growth.

The most recent in a string of transactions closed yesterday, March 2, with a group of investors paying $19.5 million for the 256-unit Southgate Apartments complex off of Mud Lane, at Preston Highway and the Gene Snyder Freeway, near the Jefferson-Bullitt county line.

The investors are affiliated with The Inland Real Estate Group of Companies Inc., which is based in Oak Brook, Ill.

That sale comes on the heels of others involving several of Icon’s retail and office properties.

Earlier this year, an Icon affiliate sold Bluegrass Manor, a 145,000-square-foot shopping center on Shelbyville Road in St. Matthews, to a subsidiary of Louisville’s Kaden Cos. for $21.5 million.

In January, Icon investors completed the sale of two Class A office buildings in Plaza Office Park on Ormsby Station Road to First Guardian Group LLC, a San Jose, Calif.-based real estate investment concern. The purchase price was $19 million.

First Guardian also bought The Shoppes at Forest Green, a two-building, 49,000-square-foot retail complex off of North Hurstbourne Parkway, in a $10 million deal that closed in August.
Sales part of Icon’s growth strategy

Bill Hysinger, an Icon partner, joked that “even our bankers” are questioning the company’s strategy of selling properties at such a rapid pace, but he said the moves are consistent with long-held plans that will lead to further development in Louisville and the surrounding area.

He also suggested that the Icon investors might not be finished with their selling spree.

A third, 72,000-square-foot speculative office building under construction at Plaza Office Park is on the market, and Hysinger said negotiations are under way with a potential buyer. He declined to identify the interested party or disclose further details about any pending sale.

“A lot of people are asking why we’re selling so many assets,” Hysinger said of the company’s recent transactions. “We’re in the development business where we buy land, build something and create value. We’re just turning our inventory over so we can go back out and do the same thing again.

“By no means are we slowing down or gearing down,” he added. “In fact, we’re gearing up.”
Projects include apartments, hotels, office, retail

Although he declined to provide details, Hysinger said Icon has “several new projects coming down the path.”

Icon, founded by Hysinger and former partner Steve Poe, specializes in a wide range of developments, including multifamily residential properties, hotels, Class A office space, shopping and retail developments, golf communities, and waterfront, marina and mixed-use projects.

The company already has a number of developments in progress, including Cardinal Club Estates, a residential community with about 150 home sites near the Cardinal Club golf course in Simpsonville; Saddle Ridge, another Shelby County development, with more than 1,200 housing units; and Champions Pointe Golf Community, a project being developed in Memphis, Ind., through a partnership with professional golfer Fuzzy Zoeller.

Other Icon investors are Nolen Allen, Clyde Ensor and Mike Ehrler.

The company is responsible for more than 20 local developments and was a partner in the construction of the $115 million Louisville Marriott Downtown convention hotel.

Poe recently left Icon to form his own firm, Poe Cos., and he is one of the developers behind the $380 million, 61-story Museum Plaza project proposed for downtown Louisville.
Broker says investors like Icon portfolio quality

Craig Collins, a broker with Commercial Ken­tucky Inc., a Louisville commercial real estate brokerage, represented Icon in recent property transactions.

He said properties in the Icon portfolio are drawing interest from investors across the country because they are of high quality, mostly new and well-leased.

He added that groups planning to invest in real estate are looking seriously at Louisville because the city doesn’t experience the extreme highs and lows often associated with larger markets.

“Louisville has always been what I call a ‘Steady Eddie,’ ” Collins said. “In Louisville, because of the diversified economy here, you’re able to find a more stable investment” than in other cities.

Collins said Icon received “four or five offers” for Southgate Apartments, a development that has a clubhouse, fitness center, swimming pool and tennis and basketball courts. It was completed in 2001 at a cost of $13 million.

“Today, there are a lot of investment dollars chasing high-quality product like that,” Collins said.
Bluegrass Manor upgraded before sale

Bluegrass Manor, built in 1967 and located at 4900 Shelbyville Road, also received interest from several potential buyers, according to Hysinger.

An Icon affiliate bought the shopping center from Louisville’s Plaza Centers Inc. for $12 million in 2003.

The company invested $500,000 in renovations and landed Whole Foods Market, a retailer of natural and organic foods, as an anchor tenant, before selling it at a $9.5 million profit.

“That’s the type of thing we go out looking to do — create value,” Hysinger said.

Mark Blieden, a partner in Kaden Cos., could not be reached to comment on the acquisition of Bluegrass Manor prior to Business First’s press deadline.
California company inquired about opportunities

First Guardian, the California company that bought retail and office holdings from Icon, approached the local partners last year about buying the Shoppes at Forest Green, an open-air center that houses a McAlister’s Deli, Limestone Restaurant and other local businesses, including a dry cleaner and medical service offices.

Officials with First Guardian could not be reached for comment prior to Business First’s press deadline.

After that deal closed last summer, the California firm inquired about other investment opportunities in Louisville, according to Collins and Hysinger. That inquiry led to the purchase of the two Plaza Office Park buildings, which are almost fully leased and have First Residential Mortgage Network Inc. as an anchor tenant.

“They were looking for high-quality, East End locations that are fully leased up and generating a nice income stream,” Hysinger said. “They approached us with an attractive price that, in our belief, was more than reasonable.”