Banchik: We ended 2010 with a bang, acquiring five centers in November and December, and selling a number of properties that created exceptional returns for our investors. We expect to continue to selectively sell properties in 2011 that will require tax-deferred exchanges, as well as push fresh equity into the retail sector. The value-added opportunities, while not appearing in a flood as expected, have been quite compelling, and we should continue to take advantage of assets needing repositioning through 2011.

Dolce: When you acquire properties in 2011, what and where will Westwood focus and why?

Banchik: For core properties, we expect to be net buyers in the Sunbelt and on the coasts, in areas that we have good concentrations of properties, market knowledge, and a successful operating history. We opened a few new target markets, including Omaha and Raleigh-Durham, which outperformed in jobs and economic growth in recent years, and expanded portfolios in Atlanta, Phoenix, Denver and Texas as well, based on existing market knowledge and availability of distressed opportunities. We prefer seasoned centers that have weathered this cycle successfully, with the top one or two grocers in terms of market share, and a reasonable amount of shop space with replaceable rents. We lean toward centers with mid- to- higher- tier demographic profiles that are less susceptible to discount grocers and category killers, but we are more focused on rents that are low relative to market and replaceable in the event of turnover. While we don’t mind owning the highest quality centers, we are less likely to out-compete certain buyers for properties of that caliber. There’s value in imperfection.

Dolce: What is your forecast for the retail sector in 2011 for both Los Angeles and overall in the Southern California area?

Banchik: We have a nationwide focus; however we have seen tremendous productivity in our Southern California properties over the past year. Many of our Southern California properties are in particularly dense or more desirable retail locations. We signed a significant volume of leases relative to the amount of available units, our renewals went smoothly with a small number of workout or decreasing renewal rents relative to other parts of the country. We found excellent pricing available from buyers for our highest quality properties, and small business lending opened up more opportunities for business owners to purchase properties. Buyers still seem tentative when it comes to mid-tier assets. While these results cannot be generalized considering the diversity of Southern California, I think overall trends bode well for stability and growth of rental rates and bottom line operations and values in the region.