Sachs Properties Sells Chesterfield Portfolio
in One of Region's Largest-Ever Deals
By Steph Kukuljan – Reporter, St. Louis Business Journal | Sep 3, 2019
From left: Mark Burkhart of BurkHill Real Estate and Executive Vice President Christopher Fox and Chairman Thomas Stern of Gershman Commercial Real Estate gather for a portrait at the Roosevelt office building in Chesterfield. Gershman Commercial Real Estate and BurkHill acquired an 18-property portfolio, which includes the Roosevelt building, from Sachs Properties.
Gershman Commercial Real Estate and BurkHill Real Estate LLC have acquired the 18-property Chesterfield portfolio of Sachs Properties in a deal expected to exceed $100 million.
The sale marks the largest transaction in Gershman's history and is among the largest-ever in St. Louis in recent memory. It marks a significant turning point for the family-owned Sachs Properties, whose leader Stephen Sachs died in 2016.
Sachs Properties will continue to control over 150 acres around Chesterfield Village, its hallmark development that helped its founder, Louis Sachs, become known as the "father of modern Chesterfield."
“The decision to sell these assets was very difficult but this transaction was as close to a win-win for everyone as we felt we could have achieved,” the Sachs family said in a statement to the Business Journal. “We felt Gershman was the ideal partner to best honor the legacy of Sachs Properties both for our employees and our tenants, and we’re very happy they were able to partner with another local firm in BurkHill.”
The portfolio, which is rebranded as the Offices of Chesterfield Village, has over 160 tenants across 13 multi-tenant office buildings, four retail properties and one industrial facility totaling 830,000 square feet at Interstate 64 and Clarkson Road.
Gershman made the investment through its subsidiary, Gershman Commercial Equities. BurkHill’s investment came through BurkHill Real Estate Fund I.
The acquisition price was not disclosed, but Gershman and BurkHill, founded by former Cassidy Turley CEO Mark Burkhart, say their investment will total more than $100 million, including planned capital improvements and the purchase price.
“This was a once-in-a-lifetime opportunity to acquire a very recognizable, well-located property from another well-known St. Louis real estate family,” said Tom Stern, Gershman's executive chairman. “There are a lot of cultural similarities between the Gershman and Sachs entities that made this transaction a great fit above and beyond the value of these significant properties.
”Gershman also will be adding a dozen Sachs Properties employees, in property management, accounting and maintenance, to its roster.
"We’re adding on over 830,000 square feet and 160 tenants, so we knew we were going to have to expand our team. It seemed logical to expand that team through those who have a long operational history with those assets," Gershman Executive Vice President Chris Fox said. "We intend to have a significant presence within the portfolio. Our management and maintenance personnel will all be housed on-site.
"Sachs first talked to Gershman about a potential deal in 2017. By January 2019, the properties were under contract. Gershman approached BurkHill Real Estate, after conducting a nationwide search, to be given the scale of the acquisition and Burkhart's experience.
"Our vision is to make them new in physical excellence. And with Gershman’s management and operations, they can be taken to operational excellence as well," Burkhart said.
Gray Design Group has been tapped to design the capital improvements, some of which will include new food service and fitness centers for the portfolio's most visible assets. Other upgrades, like landscaping and parking lot improvements, will begin this week, Fox said.