MRP Capital Group Finds Sticking Close to Walmart is Good Business
The firm recently announced the close of its first traditional investment fund, which has acquired 42 properties.
Walmart stores aren’t forever. Sometimes they close and become another part of the CRE circle of life.
But MRP Capital Group is betting heavily, and so far, successfully, on keeping its customers and investors close and the retail giant even closer.
The firm recently announced the close of its first traditional investment fund, the MRP Flyover Fund, which launched in September 2020. Already fully committed and deployed, the $105 million value went to acquiring 42 properties, a total of 950,000 square feet, across 23 states.
All those investments had one thing in common. They were retail strip centers located directly next to high-performing Walmart Supercenters in small towns and cities.
“We make sure we only purchase shadow centers next to the highest performing Walmarts in the country,” MRP Capital Group CEO Joe McClary tells GlobeSt.com. “They have to be owned by Walmart and they’ve been rebranded with all the modern shopping amenities like curb side pickup. Retail will come to go. We dive deep to make sure these markets we want to invest in will be around forever.”
The focus on Walmart locations as a proxy for ongoing business came about through observation. The firm started buying real estate in 2010, looking for properties that were recession-proof. Between then and 2015, MRP created a consolidated portfolio of just over 100 Dollar General stores.
“As we passed through these towns, we passed though regional centers and we noticed there was always a Walmart Supercenter,” McClary says. “We always syndicated every deal one by one, passing the hat around friends and family. The stars aligned in Covid. The majority of our tenants stayed open for business and we’re actually in expansion mode because we buy service-oriented retail next to the largest grocery store in the world, Walmart, which takes some of the guesswork out of everything.”
Identifying high-performance Walmart locations, however, does not come from asking the company to send convenient data.
“We use boots on the ground data,” says McClary. “We also use Nielsen, and more recently Placer AI. These software systems we pay for provide point of data credit card sales and cell phone tracking. As crazy as it sounds, we can tell when our customers are coming to our centers, how long they are spending there, and how far they’re coming. When you go to a Walmart parking lot on a Tuesday and can’t fit another car, you know they’re doing $100 million in sales.”
As for the next steps?
“We’ll be launching fund 2,” McClary says. “I would say the details aren’t out yet, but very soon.”