Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/122387
The year in deals $1.5 billion Cole Credit Property Trust II merged with Spirit Realty Capital. Cole Credit will control 56 percent of the merged entity, which will own 2,012 properties with a market value of some $7.1 billion. Spirit Realty will manage $1.1 billion New York City–based private equity fund Blackstone Group will buy a majority stake in 40 U.S. shopping centers, totaling 5.7 million square feet, from UBS AB property funds $321 million phillips edison-ARC shopping CenteR Reit bought the 65,320-squARefoot publix At noRthRidge CenteR, in miAmi, fRom A joint ventuRe led by kimCo ReAlty foR $11.6 million. portfolio of some 3 million square feet under management, is in expansion mode and intends to grow to 5 million square feet under management over the next 24 months. By contrast, Champion Real Estate Co., which specializes in urban in-fill and vertical real estate mainly in Southern California, will be divesting shopping centers. "We view this as a time to be selling, not buying," said President and CEO Bob Champion. "We are looking at historic low cap rates that are the result of our government providing subsidized financing rates, and that makes it conceivable for buyers to pay more for property than they ever had before. I'm concerned that long-term retail leases pose challenges for investors down the road if and when inflation starts to rear its ugly head. With our nation's indebtedness, inflation is inevitable." Champion Real Estate has been selling some of its urban in-fill centers where cap rates are in the 5 to 6 percent range, depending on location and tenant creditworthiness, but this does not mean that the firm is completely out of the market. Champion concedes that he is buying value-add properties in urban areas, though not suburban ones. Primestor has been forming new-development ventures with representatives of pension plans — a 380,000-square-foot project in southeast Los Angeles — and 200 SCT / M a y 2 0 1 3 for acquisitions in California, Arizona and Nevada. The firm's most recent deal was for a 100,000-square-foot neighborhood shopping center in Phoenix. "Secondary and tertiary markets got beat up badly, but if you follow the institutional capital flow, some of it is coming back to those markets," said Alan Araki, Primestor's managing director of investment services. "In just 12 months' time, investor appetite is clearly much different — it's all about risk and reward, and that's where the art of the deal comes in. Retail is one of the more challenging asset classes, with its fair share of empty boxes and the number of players in each category dropping down to the top one or two. But in my view, chaos creates opportunity." Indeed, Caldwell anticipates that retail property sales activity will be even stronger this year than last year, thanks to increased debt in the marketplace for the asset class. "If I could make one recommendation to clients, it's that they should be consuming capital," said Buono. "This is the time to be consuming capital, putting debt on those properties, especially if you believe retail has hit the bottom of the cycle and is coming back up, if interest rates are at historical lows, if rents are going to increase over time, and that you can fix your debt at lower rates." SCT Jacksonville, Fla.–based Regency Centers sold a 2.1 million-square-foot portfolio of 15 community centers to an affiliate of Blackstone Real Estate Partners VII $205 million Cole Real Estate Investments bought The Plant, a 650,000-square-foot center in San Jose, Calif., from Vornado Realty $175 million Briar Development sold a retail real estate portfolio to Bethesda, Md.–based MGP X Properties that includes 15 stores leased to Haggen Foods and Top Foods in Oregon and Washington $139 million South Beach Tristar Capital sold a 53,260-square-foot portfolio of stores in the South Beach district of Miami Beach to Terranova Corp. and Acadia Realty Trust $131.5 million KKR Real Estate Holdings bought the 1.1 million-square-foot Legends Outlets Kansas City (Kan.) at auction. KKR will co-own the property with RED Legacy $124 million Cole Real Estate Investments acquired Canarsie Plaza, a 278,000-square-foot shopping center in Brooklyn, N.Y., from Acadia Retail Trust. BJ's Wholesale Club and PetSmart anchor the center $91.5 million CBL & Associates Properties bought the 622,000-square-foot Dakota Square Mall, in Minot, N.D., from Lightstone Group $84.8 million Vestar and a fund advised by UBS Global Asset Management bought the 475,200-square-foot Riverside (Calif.) Plaza from Westminster Funds. Regal Cinemas, Trader Joe's and Vons are tenants $67.5 million Glimcher Realty Trust bought the 165,000-square-foot One Nineteen, a shopping center in Leawood, Kan., from RED Development $39.7 million Kimco Realty bought the 97,000-square-foot Wilton (Conn.) Campus Shops from Kleban Properties, Westport, Conn. The center, anchored by a Stop & Shop, is part of a mixed-use complex