Paragon Commercial Group is bullish on the California retail market—even if others aren't. The firm has announced plans to buy $500 million in neighborhood retail centers throughout California, where the firm is based, in the next 18 months. With capital attention focused on the industrial market, Paragon believes this is an ideal time to acquire retail product at strong pricing.

“We believe that retail is hyper localized and it is critical to be close to the assets that you own, operate and manage, especially when you are doing heavy repositioning and value-add, which is the majority of what we do, and there are enough infill markets in California to keep us busy,” Jim Dillavou, co-founder and principal of Paragon, tells GlobeSt.com. “The choppiness in the retail market right now provides the ability for us to do that. There hasn't been urban retail centers trading at the price that they are trading for now for at least a decade, and we think there is an opportunity to capitalize on that.”

The firm plans to spend $300 million in Northern California, and the remaining $200 million in Southern California. “We are under allocated in Northern California. More of our portfolio is located in Sothern California than Northern California, and we are trying to even that out a bit,” says Dillavou. In general, Paragon will target neighborhood retail centers, which often means daily needs or grocery anchored product.