Shopping Center Business

DEC 2017

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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INSTITUTIONAL INVESTORS 86 • SHOPPING CENTER BUSINESS • December 2017 and funds. I run our East Coast retail as- set management, which includes working closely with our acquisition folks. We cur- rently have about $10 billion invested in retail. I am spending a lot of my time with our acquisition team, portfolio managers and clients discussing why to invest in par- ticular retail assets. We've been cautious the last few years, but when you find the right asset with a strong location, the right tenants or there's repositioning play, I'm involved in sharing that strategy within Clarion. TOM FALATKO : I'm senior vice president of shopping center acquisitions for VE- REIT, which is a full-service real estate operating company with a diverse portfo- lio of single-tenant office, industrial and retail properties. We have approximately 650 tenants, 4,100 properties and $14.7 billion in asset value. We also manage $7.8 billion of gross real estate investments on behalf of the Cole Capital non-listed RE- ITs where we invest in anchored shopping centers. ED SENEMAN : I am senior managing di- rector of investments at Sterling Organiza- tion. We're a private equity firm that runs two funds: a value-add fund and a stabi- lized fund. We own 9 million square feet of retail with a value of close to $2 billion. DORON VALERO : I'm managing partner of Global Fund Investment. Global acquires, develops, redevelops, manages and leases retail real estate, specifically food anchor shopping centers, in the United States. Global owns and self manages 30 shop- ping centers in Texas, Florida and Geor- gia totaling 3.8 million square feet of leas- able retail space. Global focuses on value added redevelopment opportunities. CATHY CLARK : I'm with Ramco-Gersh- enson. I run the transaction side of the business, so anything we buy or sell comes through my group. We are positive on re- tail if it's the right retail, and in our view, the future of retail is in large, regionally dominant centers that provide value and convenience, while bringing the commu- nity together, as well as urban-oriented centers that cater to large daytime popu- lations and offer convenience, entertain- ment and food concepts. Our goal is to be able to add value to everything we buy. ROSS COOPER : I'm with Kimco. Kimco is very excited about retail today — we see it as an evolution, not a revolution. We've really transformed our portfolio over the past five to six years, selling close to $6 billion worth of assets. We've reinvested just about the same amount, but the quali- ty and infill nature of our portfolio is such that, contrary to some of the headlines, we see the fundamentals on our end as being as strong as they've ever been. We're approaching all time highs in occupancy, and we continue to see very strong leasing spreads on our new deals. For the right real estate that has adaptability and the ability to be redeveloped to create value in some capacity, we're excited to keep investing in that type of asset. BERNADETTE MUSSELL : I'm with L&B; Realty Advisors based in Dallas. We're an institutional real estate investment advisor with around $8.5 billion under management. I work primarily on retail acquisitions; we're doing some ground-up mixed-use development. We are positive on some retail subsectors. I've been work- ing with our research department on a pa- per for grocery, and we don't see grocery stores and e-commerce as an either-or, but an 'and.' Grocery-anchored centers and grocery stores are going to benefit from the online presence as well as the bricks- and-mortar presence. We're looking at very infill, high barriers to entry centers with a strong competitive position. We're very disciplined in our underwriting and our site selection. We're positive on retail — it's certainly not the favorite product class right now, I think industrial is more popular, but we are looking at retail. JOHN RAGLAND : I'm managing director and head of U.S. retail for TH Real Estate. TH Real Estate has gone through a num- ber of name changes, but we are a subsid- iary of Nuveen Asset Management, which is owned by TIAA. We have global assets unde management over $100 billion, of which $16 billion of that is invested in retail within the U.S. Of that, $10.5 bil- lion is in equity, $6 billion is in debt and I would say that, although we are known as a significant mall investor, of that $11 billion in equity of the over 86 properties we have across the country, only 11 are malls, so we're a very diversified investor in retail across grocery-anchored, power centers, urban and lifestyle centers, as well as malls. We continue to deploy a significant amount of money this year in retail, and expect to do so next year as well. We believe that the disruptions that are occurring in retail today will actually create some fairly attractive buying op- portunities in the future. Although we'll be cautious about investing in anything below Class A properties, we believe that the headlines heralding the 'death of re- tail' are somewhat misleading. BARRY CARTY : I'm vice president of ac- quisitions for Federal Realty on the East Coast. Federal is a publicly traded REIT — we own about 24 million square feet of retail space in primarily major markets on the East Coast and in California. Near term, we're cautious like a lot of people here in the face of all of the changes oc- curring in retail, but we're also bullish that we will come out of this change with significant opportunities since we are well capitalized and patient. In terms of what we invest in, the only product type that we have not invested in is enclosed malls, so we're in community and neighborhood centers, and some power and street retail. Keys for us are barriers to entry and rede- velopment upside. SCB : A lot of you are facing a question from investors and other groups — why retail, why now, why are you still bullish? What answers are you giving? CLARK : We do find ourselves answering that question, and I think that you don't want to put your head in the sand — we are going through an evolution in retail for sure — but the future is continued collaboration between e-commerce and brick-and-mortar. We see e-commerce tenants that are opening brick-and-mor- tar stores. We are also very aware of the changing landscape of national retailers and the fact that some are reducing store counts and/or store size. Many times this provides opportunities to add value. You have to look at your rents, who can back-

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