The September acquisitions included a Lowe's home-improvement story in Chester, NY; BJ's Wholesale Club in Ft. Lauderdale, FL; Home Depot in San Francisco; and Winter Garden Village at 3251 Daniels Rd. in Winter Garden, FL just outside Orlando. The 1.1-million-sf Winter Garden represents $180 million of the September tab.
Michael Stubben, vice president of portfolio management for the Phoenix-based Cole, says investment activities were limited during the first half of the year and picked up the pace in July when it spent about $147 million on seven properties totaling 1.3 million sf. It followed up with another $135 million of activity in August.
"We have been pretty patient, waiting for the right market conditions," Stubben tells GlobeSt.com. "With the CBMS going away, we kind of had to shift and build relationships with insurance companies, foreign banks and alternative sources in the US. We kind of waited till that summer period for things to gel."
Until recently, Stubben says the climate for investment had been generally good for several months. "There was some great real estate at great prices. Many people were in a position where they had to dispose of properties. It was almost distressed sale situations," he says, adding the company managed to amass $500 million of funding from several sources. "With the acquisition of Winter Garden Village, we closed out a lot of that, but we still have about $100 million to work with," he adds.
The Cole exec notes the past week has altered the picture dramatically. "A lot of foreign banks pulled out," Stubben explains. "Insurance companies are still in, but they have significantly tightened underwriting criteria. It had been a very positive environment for the past four or five months, but it will be a lot more challenging going forward."
Nonetheless, Stubben says Cole will continue to be as aggressive as possible, seeking out well-priced properties in strong locations. Although the company has been buying primarily in the Midwest, Southwest and Southeast because of lower pricing, it has not ruled out any geographical area. It is strongly focused on retail assets, but it also is looking at some industrial opportunities and is particularly enthusiastic about working with developers on sale-leasebacks. "We find some very attractive cap rates for sale-leasebacks," he says. Cole-affiliated entities now own about $4 billion of real estate assets totaling 21.8 million sf.
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