LOS ANGELES-Artemis Real Estate Partners and Primestor Development have formed a joint venture to acquire institutional quality core-plus retail properties in mainstream locations throughout the state.
They will be acting on behalf of the New York Common State Retirement Fund's $300-million real estate emerging manager program. That program invests to best-in-class operating partners that have market and product expertise. Primestor was approved by the retirement fund as a retail operating partner in the emerging manager program focused on California.
“We are excited about this strong opportunity to partner with Artemis and expand our platform,” says Alan Araki, the managing director of investments at Primestor. He tells GlobeSt.com that the pension fund is "looking for stabilized assets in good locations in the Southern California area. I guess their definition is core-plus, so it's not a long-term leases for 20 years kind of deal. They're willing to accept some leasing risk. For the most part, they're just looking for stable, good properties. That could be grocery-anchored neighborhood to smaller power centers, maybe even some street front retail."
Araki faces a challenge because of a highly-competitive market. "I haven't seen a whole lot come to the market this year," he says. "The good properties that are well-located get quite a bit of bid action on them, so it's very challenging. If you think about it, there's been a dearth of new supply since the big recession of a few years ago. So there's really not a whole lot of new product trading and because of institutional ownership, there's not a lot of people trading out of things."
The strategy will be "looking a little beyond the main locations," Araki says. "We're not going to secondary or tertiary markets. L.A. county is 88 cities and there's lots of nice neighborhoods with good density and strong properties in micro locations that don't get theattention from some of the larger institutions looking for larger deals. Our deal size is $10 million to $20 million."
Artemis is still identifying qualified operating partners to join the program, which is initially targeting six to 10 emerging managers, with particular interest in minority and women-owned business enterprises. The account invests capital in institutional commercial real estate alongside approved emerging manager operating partners.
In October, 2011, the office of New York state comptroller Thomas DiNapoli announced that the retirement fund would allocate $300 million to Artemis as its initial investment in a new real estate component of the retirement fund's emerging manager portfolio. The objective of the separate account is to provide the Fund with access to proven real estate joint venture operators that have less than one billion dollars of equity capital under management and that possess extensive local market knowledge and property type expertise.
As a JV partner with the fund, Artemis seeks to deliver enhanced core returns by making and managing equity and debt investments with qualified emerging managers.
Artemis Real Estate Partners is a real estate investment management firm that seeks to invest with niche local operating partners, both established and emerging, in multifamily, office, industrial, retail and senior housing across opportunistic, value-added and enhanced core strategies.
Artemis has raised $736 million of investor capital across two vehicles: $436 million of capital for Artemis Fund I and $300 million of capital in separate account with the New York State Common Retirement Fund. Artemis's sole focus is U.S. commercial real estate.
Primestor focuses in the retail sector and takes an ownership-style community focus and hands-on approach with leasing and management. As a developer/operator, Primestor is pro-active in repositioning existing centers from both a physical and rent roll perspective. Primestor currently manages over three million square feet in its portfolio and has over 700,000 square feet of new construction underway.
As reported earlier by GlobeSt.com, Primestor director of development Vanessa Delgado talked about the emerging role of Hispanic consumers.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
