New Retail, Industrial JVs Indicate $340M Worth of Market ...

By Scott Baltic, Contributing Editor

Champion Real Estate president & founder Bob Champion

Two just-announced joint ventures are another indication of a strengthening CRE sector, or at least evidence that opportunities are still to be found in distressed properties. Between them, the JVs are looking to acquire assets totaling more than a third of a billion dollars.

Champion Real Estate Co. and Chris Wilson, founder of Wilson Commercial Real Estate, both of Los Angeles, announced a partnership called Champion-Wilson Retail to acquire, develop and renovate retail properties throughout California.

In the industrial sector, a programmatic joint venture equity vehicle was formed between Sitex Realty Group and State Teachers Retirement System of Ohio. The JV aims to acquire more than $140 million of industrial real estate in the Chicago and New York?New Jersey metro areas over the next 24 months.

Champion Real Estate has allocated $50 million of equity to the Champion-Wilson Retail venture, anticipating that it could be leveraged up to $200 million in properties over the next three years. Chris Wilson will lead the new initiative, but will retain his role as chairman of Wilson Commercial.

Champion-Wilson Retail will focus on acquiring existing retail projects with value-add opportunity; distressed retail assets and notes; and prime shopping center and urban retail land. The venture also expects to use Champion?s public-private experience to restart retail projects abandoned following the demise of California redevelopment agencies. The venture will consider opportunities in prime retail markets ranging in price from $10 million to $100 million.

Champion president & founder Bob Champion told Commercial Property Executive that the JV?s focus is on prime retail locations, whether existing or to be developed. ?We expect to buy sites either directly from agencies or sites foreclosed on by banks that previously had agency sponsorship, and rather than getting public benefit through subsidy, we get it through offsites and entitlements,? he said.

?Although the general recovery has been slow and there is even the possibility that we slip back into recession,? Champion told CRE, ?consumer confidence and spending have improved and retail sales in certain categories have improved. In addition, existing retailers that are re-formatting their size to exist in both virtual and bricks-and-mortar worlds will need new locations.?

The Sitex Realty/OSTRS venture will be led and operated by Sitex and will focus exclusively on value-add acquisitions in the industrial asset class.

Jones Lang LaSalle?s Capital Markets and Industrial Services practices arranged the JV. James Tramuto, executive vice president, Capital Markets, and Keith Stauber, regional managing director, Industrial Services, led the team, along with John Huguenard, managing director and head of Industrial Capital Markets; Dave Hendrickson, managing director, Capital Markets; and Sean Devaney, vice president, Capital Markets. Both Sitex Realty and OSTRS are long-time JLL clients.

?While programmatic joint ventures have been tough to come by in this new cycle, we were very fortunate to find the cross-section of needs between a boutique industrial owner/operator focused on value-add assets, and a national pension fund system in search of an efficient way of investing in that very same product,? Tramuto said.

Since its founding in 2001, Sitex Realty Group has focused its efforts on acquiring and adding value to industrial property including warehouse/distribution, manufacturing and flex/tech buildings. This will be Sitex?s seventh fund.

STRS of Ohio is the 18th-largest domestic U.S. pension fund, with a real estate portfolio valued at just over $5.6 billion and a total investment portfolio of over $65 billion.

Related Posts:

lana turner donald glover julio cesar chavez jr jason segel turducken power rangers jungle fury power rangers jungle fury