CHICAGO — When it comes to Sun Belt retail investment, InvenTrust Properties certainly has a sunny disposition with regard to acquisitions. The shopping center REIT's growth strategy calls for $150 million to $200 million in retail asset additions a year for the next two years. According to David Heimberger, InvenTrust Properties' new chief investment officer, the Sun Belt region offers the right investment combination that will continue to enhance IVT's simple and hyper-focused portfolio.
"The demographic trends in Sun Belt markets are more attractive than others," said Heimberger. "They also, in general, have business-friendly environments and lower taxes, and who doesn't appreciate the warmer weather. Over the past decade, the migration south of people, corporations and high paying jobs has been evident with the pandemic only accelerating the trek south. The improving demographics and increased discretionary spending in our markets makes our centers a prime location for retailers to conduct their businesses."
Atlanta, central and South Florida cities, and Southern California are prime Sun Belt targets on InvenTrust's acquisitions radar, but Austin tops the list with its strong combination of business strength, including a burgeoning tech sector, and rich culture. Heimberger says InvenTrust maintains a robust pipeline of opportunities in their Sun Belt markets and continue to explore other prospects. Moving into other Sun Belt markets is a possibility, such as South Carolina, but only if the company can build scale quickly to ensure operational efficiencies.
It's said that necessity is the mother of invention, but in retail it's currently the motivator for investment. At its most basic, people have to eat and take care of daily family needs, which is why InvenTrust is heavily positioned in necessity-based, grocery-anchored real estate. The REIT's mix of neighborhood and community centers were a key component in servicing the communities they were located in.
"Before the pandemic, the headline risk across retail was that e-commerce was going to continue to grow exponentially creating more strain on bricks and mortar stores, but food and service-oriented offerings were always the outliers," Heimberger said. "Throughout the last two years grocery-anchored retail has been tested and proven."
The REIT has come a long way by sticking to its strong retail investment fundamentals, but it's also willing to get creative with deals, including various sourcing angles including through off-market sources. InvenTrust also selectively acquired two assets from its joint venture in the last year and a half. One of those, Prestonwood Town Center in Dallas, is a well-located power center with an abundance of day traffic.
"Our acquisition growth is going to come from our balance sheet," he said. "Our leverage level is well below our peer set and with IVT becoming a traded company, now is the time to use this clear differentiator to the company's advantage. We believe successfully executing on our acquisition strategy will drive cash flow and bring increased value to our shareholders."
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Brian Lee
Brian Lee is an Albany-based litigation reporter for the New York Law Journal. He has worked at daily newspapers in Massachusetts, New York and New Jersey. He can be reached at [email protected]. Twitter: @bleereporter
