Retail's recovery continues apace, with overall occupancy approaching 2020 numbers, according to the ICSC. It's left some developers taking a hard look at the sector for ground-up and value-add opportunities. But getting a project to completion in the current environment can be difficult.
That's where a knowledgeable partner comes in, say Michael Ambrosi and Chris LeCates of ARCTRUST. The COO and VP/head of acquisitions, respectively, note that a partnership can help not just with opportunities and resources but also with the expertise to get the project to completion and beyond.
A Program Built on Versatility
A fully integrated real estate company, ARCTRUST has been responsible for the development, acquisition, and joint venture funding of more than 500 projects with an aggregate value in excess of $5 billion over its 38-year history and has been the recipient of numerous industry awards. The core of the business for decades has been net lease retail with a focus on traffic light corners and "locations that attract the better-quality tenants" To achieve scale, however, they realized they needed to back others in joint ventures in order to fully employ their money, resources, and hard-won knowledge.
That was the start of ARCTRUST's MORE program. MORE stands for Money, Opportunities, Resources, and Experience. "ARCTRUST brings more to a relationship than your typical joint venture partner," Ambrosi says, "We are not just bringing capital to the table. The principals of ARCTRUST have a nearly 40-year history in all phases of real estate development, including the approval and entitlement process, working with the municipalities, land seller negotiations, environmental issues and the construction process. We all have experience being the boots-on-the-ground and can share a perspective with our joint venture developers that most typical financial partners cannot."
ARCTRUST promotes the program as a "True Joint Venture Relationship", with a focus on an initial pipeline of transactions that is then expanded to create new opportunities for its JV partners through its relationships with nationally recognized tenants and its excellent reputation with developers, brokers, and sellers. The approach has led them to deals in every state from New York to Florida as well as select Western and Midwestern markets.
The program allows joint venture partners to leverage ARCTRUST's back-office resources and support that includes in-house legal team, accounting team, engineering and management to help ensure that projects can finish on time and on budget.
A Partnership with Many Hats
LeCates describes their position in the industry as being between family and friends on one side and institutional on the other. "We tend to align with successful sponsors whose pipelines have outgrown their capital sources. We have a greater flexibility than most institutional sources of capital and are open to creative structures that address the needs of our partners," he says, and notes it has extended as far as raising outside money as a co-GP and acting as a co-sponsor.
Still, LeCates notes, while ARCTRUST prefers to remain a silent partner, they do judge every deal on whether they have the ability to do the development themselves. "Our first question of any development deal is whether we understand it enough to do the work ourselves. It is the first gate to build the necessary support to proceed with an investment," explains LeCates.
"We're there to help the partner in any way that we can," Ambrosi says. "Whether it's our resources, whether it's our experience, whether it's finding a new project for them to work on."
There are many capital options available to experienced and reliable sponsors in the marketplace. In a business where not all partners are created equal, ARCTRUST delivers MORE.
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