Editor’s Note:Chain Store Age’s 18th annual survey of Fastest-Growing Acquirers measured retail square footage purchased during the preceding calendar year–2006.
With capitalization rates continuing at record lows, and record high prices for retail real estate, a casual observer really might not expect to see companies acquiring more than 30 million sq. ft. of retail space in a year.
Yet the top two acquirers for 2006 did exactly that, helping to consolidate a still-fragmented open-air business in the United States, and extending their reach outside the country.
And the consolidation shows no sign of slowing down, with a parent of top acquirer Centro Watt already agreeing to buy No. 5-ranked New Plan Excel Realty Trust.
No. 1: Centro Watt
2006 Fastest-Growing Acquirers
|Centro Watt||Plymouth Plaza, Pa.||37,481,656 sq. ft.|
|Kimco Realty Corp.||New Hyde Park, N.Y.||36,387,778 sq. ft.|
|Developers Diversified Realty||Beachwood, Ohio||9,888,836 sq. ft.|
|Inland Real Estate Group of Cos.||Oak Brook, Ill.||9,683,258 sq. ft.|
|New Plan Excel Realty Trust||New York, N.Y.||4,358,147 sq. ft.|
|DLC Management||Tarrytown, N.Y.||4,061,700 sq. ft.|
Centro Watt placed first among acquiring companies in 2006, and now its co-parent, Melbourne, Australia-based Centro, has announced plans to acquire New Plan Excel Realty Trust.
The 2006 numbers were dominated by Centro Watt’s $3.3-billion purchase of Heritage Property Trust, a transaction that added 22 million sq. ft. of retail space at once.
“The market in the United States is very deep and broad,” said Tony Torney, COO of Philadelphia-based Centro Watt.
Centro Watt also is a joint venture of Santa Monica, Calif.-based Watt Commercial, giving the company fund-ing—and motivation.
“We have a lot of money coming out of the Australian capital markets,” Torney observed. In addition, most of the local institutional-grade assets already are held by owners not looking to sell in the near term. So Centro Watt has looked to the United States, and also is looking in the United Kingdom for quality retail assets.
Property Acquisitions Completed in 2006
|Heritage REIT Portfolio||157 properties in 27 states||32,500,000 sq. ft.|
|Eagle Rock Plaza||Los Angeles, Calif.||459,717 sq. ft.|
|Westland Town Center||Lakewood, Colo.||533,342 sq. ft.|
|Enfield Square||Enfield, Conn.||798,398 sq. ft.|
|West Park Mall||Cape Girardeau, Mo.||525,328 sq. ft.|
|Independence Mall||Wilmington, N.C.||1,021,423 sq. ft.|
|Midway Mall||Elyria, Ohio||1,110,420 sq. ft.|
|Richland Mall||Richland, Ohio||533,028 sq. ft.|
|37,481,656 sq. ft.|
The company entered the United States early in the decade, largely on the West Coast, then became a major player in the Northeast with its 2005 acquisition of Kramont Realty Trust. And future acquisitions certainly are possible.
“Who knows?” Torney said. “We try to look at every opportunity that makes sense to our investors.”
No. 2: Kimco Realty Trust
Adding 36 million sq. ft. to a portfolio involved more than just buying Pan Pacific Retail Properties. Though that single $4 billion transaction added 138 properties totaling 22.6 million sq. ft. to its list, New Hyde Park, N.Y.-based Kimco Realty Trust used various transaction types to build its portfolio.
“The company has done a good job over the years of buying multiple portfolios,” said David Henry, chief investment officer. “Pan Pacific was the fifth public company we’ve bought since 1998.”
Developers Diversified Realty
Property Acquisitions Completed in 2006
|Riverchase Promenade||Birmingham, Ala.||21,774 sq. ft.|
|Deer Valley Towne Center||Phoenix, Ariz.||453,815 sq. ft.|
|Paseo Colorado||Pasadena, Calif.||556,961 sq. ft.|
|Mervyns||San Diego, Calif.||73,872 sq. ft.|
|Mervyns||Valencia, Calif.||77,776 sq. ft.|
|Flatacres Marketcenter||Parker, Colo.||221,520 sq. ft.|
|Turner Hill Marketplace||Lithonia, Ga.||157,175 sq. ft.|
|McDonough Marketplace||McDonough, Ga.||22,658 sq. ft.|
|Overland Pointe Marketplace||Overland Park, Kan.||83,047 sq. ft.|
|Fairplain Plaza||Benton Harbor, Mich.||222,739 sq. ft.|
|Riverdale Village||Coon Rapids, Minn.||33,637 sq. ft.|
|Tri-County Mall||Cincinnati, Ohio||1,336,157 sq. ft.|
|Township Marketplace||Monaca Pa.||46,470 sq. ft.|
|Frisco Marketplace||Frisco, Texas||107,543 sq. ft.|
|McKinney Marketplace||McKinney, Texas||118,967 sq. ft.|
|The Marketplace at Town Centre||Mesquite, Texas||178,925 sq. ft.|
|3,713,036 sq. ft.|
|2,748,625 sq. ft.|
|3,427,175 sq. ft.|
|9,888,836 sq. ft.|
But over time, its acquisition strategy is changing, essentially turning the company into managers for pension funds, Henry said. Kimco’s purchases in the United States are largely for pension funds rather than for its own portfolio, he noted.
When investing its own capital, the company is pursuing more opportunistic deals, increasing its investments in Canada and Mexico, and acquiring property in Mexico for ground-up development.
No. 3: Developers Diversified Realty
Long one of the major consolidators of open-air centers, Developers Diversified Realty continued to be a major purchaser in 2006. Perhaps most interesting, the company took a 50% interest in Sonae Sierra Brazil, giving the company interests in nine malls. In addition, it plans to acquire and develop throughout Brazil, feeding both its development and acquisition pipelines. Many acquisitions this year will be part of its $3 billion joint venture with TIAA-CREF, giving the company a new role, that of a fund manager, as well as an owner.
“That’s how we’re able to do these deals,” said Scott Wolstein, CEO of Beachwood, Ohio-based Developers Diversified Realty.
Already this year, Developers Diversified has closed on a $6 billion, 43.6 million-sq.-ft. acquisition of Inland Retail Real Estate Trust, yet another joint venture with TIAACREF.
No. 4: Inland Real Estate Group of Cos.
Kimco Realty Corp.
Property Acquisitions Completed in 2006
|Diamond Shopping Center||Anchorage, Alaska||85,163 sq. ft.|
|Foothills Mall||Tucson, Ariz.||503,084 sq. ft.|
|Cupertino Village||Cupertino, Calif.||115,000 sq. ft.|
|Poway Center||Poway, Calif.||16,000 sq. ft.|
|Tyler Street Plaza||Riverside, Calif.||86,000 sq. ft.|
|Groves at Lakeland||Lakeland, Fla.||105,000 sq. ft.|
|Cypress Lakes Town Center||Palm Aire, Fla.||250,000 sq. ft.|
|Riverwalk Marketplace||Duluth, Ga.||78,000 sq. ft.|
|South Central Shopping Center||Moultrie, Ga.||196,589 sq. ft.|
|Shops at Kildeer||Kildeer, Ill.||167,000 sq. ft.|
|Bridgewood Plaza||West Des Moines, Iowa||63,423 sq. ft.|
|Overland Park||Overland Park, Kan.||205,779 sq. ft.|
|Owensboro Town Center||Owensboro, Ky.||156,672 sq. ft.|
|East Side Plaza||Shreveport, La.||78,591 sq. ft.|
|Mallside Plaza||Portland, Maine||91,000 sq. ft.|
|Long Gate Shopping Center||Ellicot City, Md.||433,000 sq. ft.|
|180 Canal Street||Boston, Mass.||30,859 sq. ft.|
|Boston MBC portfolio||Boston, Mass.||748,998 sq. ft.|
|Haverhill Plaza||Haverhill, Mass.||63,203 sq. ft.|
|The Center at Hobbs Brook||Sturbridge, Mass.||231,000 sq. ft.|
|Fountains at Arbor Lakes||Maple Grove, Minn.||407,000 sq. ft.|
|Windsor Corporate Park||East Windsor, N.J.||287,065 sq. ft.|
|Edgewater Commons||Edgewater, N.J.||424,000 sq. ft.|
|Market at Bay Shore||Bay Shore, N.Y.||177,000 sq. ft.|
|Pathmark Shopping Center||Centereach, N.Y.||102,000 sq. ft.|
|Airport Plaza||Farmingdale, N.Y.||448,000 sq. ft.|
|100 Van Dam Street||New York, N.Y.||40,600 sq. ft.|
|387 Bleeker Street||New York, N.Y.||1,349 sq. ft.|
|625 Broadway||New York, N.Y.||83,000 sq. ft.|
|Hylan Plaza||Staten Island, N.Y.||358,000 sq. ft.|
|Clakamas Promenade||Clakamas, Ore.||237,000 sq. ft.|
|Great Northeast Plaza||Philadelphia, Pa.||290,000 sq. ft.|
|Arboretum and Southbrook||Austin, Texas, and Georgetown, Texas||94,651 sq. ft.|
|Century South||Austin, Texas||341,559 sq. ft.|
|Homestead Shopping Center||Austin, Texas||88,829 sq. ft.|
|Sunset Valley Marketfair||Austin, Texas||290,000 sq. ft.|
|Conroe Marketplace||Conroe, Texas||244,000 sq. ft.|
|Crème de la Crème||Coppell, Texas||20,000 sq. ft.|
|Trinity Mills||Dallas, Texas||18,740 sq. ft.|
|Cottonwood Village||Houston,Texas||350,000 sq. ft.|
|Lake Jackson Marketplace||Lake Jackson, Texas||58,106 sq. ft.|
|Round Rock West||Round Rock, Texas||131,039 sq. ft.|
|Westbank Market||West Lake Hills, Texas||138,000sq. ft.|
|8,334,299 sq. ft.|
|2,694,631 sq. ft.|
|2,326,848 sq. ft.|
|2,150,000 sq. ft.|
|986,000 sq. ft.|
|19,896,000 sq. ft.|
|36,387,778 sq. ft.|
Inland Real Estate Group of Cos. dropped from first place among acquirers in 2005 to fourth place a year later, but that does not mean its people weren’t working hard. In fact, they’ve been busier than ever.
“Last year was rather unusual in that we had a much higher percentage of acquisitions that came to us through sellers calling us cold,” said a laughing Joe Cosenza, vice chairman of The Inland Real Estate Group of Cos., Inc., and president of Inland Real Estate Acquisitions, Oak Brook, Ill. “And I’d like to thank each and every one.”
But such transactions are harder on Inland’s staff than buying entire portfolios.
“We might do 200 or 300 a year where others do 100 or even 50.” They’re also a testament to Inland’s success, he added.
“The world woke up to what we’re doing, which is good and bad,” Cosenza said. “It means we’re a step up in people’s eyes, and people want to invest with us.” As of Dec. 31, 2006, The Inland Real Estate Group of Cos., Inc. owned 116 million sq. ft. of retail, as well as industrial and office projects, and undeveloped land.
No. 5: New Plan Excel Realty Trust
In a buyers’ market, sometimes the buyer itself can get bought. A case in point is New Plan Excel Realty Trust. At presstime, New Plan was to be acquired by Melbourne, Australia-based Centro Properties Group, a parent of top-ranking Centro Watt, for $6.2 billion.
During 2006, New Plan added nearly 4.4 million sq. ft. in 15 states for an aggregate investment of $515 million, including $336 million of co-investments, despite low cap rates and competition for the best properties.
“Our access to multiple capital sources and capacity to efficiently source, underwrite and integrate assets on a national basis [given our state-of-the-art national infrastructure] has become increasingly important given the highly competitive market for our property type,” said Stacy Slater, senior VP of corporate communications.
Transactions included acquisitions of neighborhood and community centers in Tennessee, Illinois and Texas, among other states, both individually and in partnership.
At presstime, the acquisition by Centro was expected to be completed in the second quarter of 2007.
Inland Real Estate Group of Cos.
Property Acquisitions Completed in 2006
|Northwood Crossing||Tuscaloosa, Ala.||148,749 sq. ft.|
|Yuma Palms Regional Center||Yuma, Ariz.||496,224 sq. ft.|
|Pacheco Pass Phase II||Gilroy, Calif.||95,036 sq. ft.|
|Stop & Shop||Southington, Conn.||64,948 sq. ft.|
|Lakewood Shopping Center Phase I||Margate, Fla.||149,077 sq. ft.|
|Walter’s Crossing Shopping Center||Tampa, Fla.||126,912 sq. ft.|
|Eastwynn Theatres, Inc.||Athens, Ga.||52,990 sq. ft.|
|Old Time Pottery||Douglasville, Ga.||110,174 sq. ft.|
|Battle Ridge Pavilion||Powder Springs, Ga.||103,517 sq. ft.|
|The Plaza at Eagles Landing||Stockbridge, Ga.||33,266 sq. ft.|
|Algonquin Commons||Algonquin, Ill.||565,000 sq. ft.|
|Fabyan Randall Plaza||Batavia, Ill.||91,395 sq. ft.|
|Lincoln Village||Chicago, Ill.||138,962 sq. ft.|
|Discovery Clothing Co.||Glendale Heights, Ill.||10,000 sq. ft.|
|TSA Stores, Inc.||Glendale Heights, Ill.||42,000 sq. ft.|
|Ulta Cosmetics & Salon||Glendale Heights, Ill.||8,820 sq. ft.|
|Shops of Sherman Plaza||Evanston, Ill.||152,264 sq. ft.|
|Ravinia Plaza||Orland Park, Ill.||101,384 sq. ft.|
|State Street Market||Rockford, Ill.||193,657 sq. ft.|
|Wauconda Crossings||Wauconda, Ill.||90,290 sq. ft.|
|East Lloyd Commons||Evansville, Ind.||159,681 sq. ft.|
|Honey Creek Commons||Terre Haute, Ind.||179,100 sq. ft.|
|Stop & Shop||Framingham, Mass.||64,917 sq. ft.|
|Stop & Shop||Malden, Mass.||79,229 sq. ft.|
|Stop & Shop||Swampscott, Mass.||65,268 sq. ft.|
|Bangor Parkade Shopping Center||Bangor, Maine||232,764 sq. ft.|
|The Centre at Laurel||Laurel, Md.||157,909 sq. ft.|
|Walgreens Drug Store||Westland, Mich.||13,905 sq. ft.|
|Big Lake Town Square||Big Lake, Minn.||67,835 sq. ft.|
|Apache Shoppes||Rochester, Minn.||60,780 sq. ft.|
|Shakopee Center||Shakopee, Minn.||103,442 sq. ft.|
|The Shoppes at Grayhawk||Omaha, Neb.||226,720 sq. ft.|
|Monadnock Marketplace||Keene, N.H.||200,775 sq. ft.|
|Greenwich Center||Phillipsburg, N.J.||186,520 sq. ft.|
|Giant Foods||Sicklerville, N.J.||68,323 sq. ft.|
|Stop & Shop||Hyde Park, N.Y.||52,500 sq. ft.|
|Pavilion at King’s Grant Phase II||Concord, N.C.||142,471 sq. ft|
|Patterson Place Shopping Center||Durham, N.C.||161,017 sq. ft.|
|Harper Hill Commons||Winston-Salem, N.C.||96,914 sq. ft.|
|Canfield Plaza||Canfield, Ohio||100,949 sq. ft.|
|Stringtown Crossing||Grove City, Ohio||143,938 sq. ft.|
|Market at Hilliard Shopping Center||Hilliard, Ohio||107,544 sq. ft.|
|The Stack at the Waterfront||Homestead, Pa.||29,825 sq. ft.|
|Stop & Shop||Bristol, R.I.||63,128 sq. ft.|
|Stop & Shop||Cumberland, R.I.||85,799 sq. ft.|
|Lincoln Mall||Lincoln, R.I.||439,132 sq. ft.|
|BI-LO||Greenville, S.C.||55,718 sq. ft.|
|The Shops at the Point||Greenville, S.C.||104,645 sq. ft.|
|Plaza at Carolina Forest||Myrtle Beach, S.C.||124,437 sq. ft.|
|East Stone Commons Shopping Center||Kingsport, Tenn.||272,145 sq. ft.|
|Crockett Square Shopping Center||Morristown, Tenn.||107,122 sq. ft.|
|Crossroads Square||Morristown, Tenn.||70,000 sq. ft.|
|Willowbrook Commons||Nashville, Tenn.||93,600 sq. ft.|
|South Towne Crossing||Burleson, Texas||59,986 sq. ft.|
|Rivery Town Crossing||Georgetown, Texas||74,456 sq. ft.|
|Eldridge Lakes Town Center||Houston, Texas||35,480 sq. ft.|
|CyFair Town Center||Houston, Texas||47,520 sq. ft.|
|New Forest Crossing Shopping Center Phase II||Houston, Texas||26,680 sq. ft.|
|Hunting Bayou Shopping Center||Jacinto City, Texas||133,165 sq. ft.|
|Lake Worth Towne Crossing||Lake Worth, Texas||239,761 sq. ft.|
|Craig Crossing||McKinney, Texas||123,216 sq. ft.|
|Brooks Corner Shopping Center||San Antonio, Texas||166,205 sq. ft.|
|Sherman Town Center||Sherman, Texas||353,621 sq. ft.|
|Southlake Corners||Southlake, Texas||135,128 sq. ft.|
|Spring Town Center||Spring, Texas||40,571sq. ft.|
|Colony Square||Sugar Land, Texas||435,268 sq. ft.|
|Riverpark Shopping Center||Sugar Land, Texas||308,405 sq. ft.|
|Central Texas Marketplace||Waco, Texas||525,906 sq. ft.|
|Hollywood Entertainment||Virginia Beach, Va.||7,488 sq. ft.|
|Walgreens Drug Store||Oshkosh, Wis.||13,905 sq. ft.|
|Pick’n Save Shopping Center||Waupaca, Wis.||63,780 sq. ft.|
|9,683,258 sq. ft.|
No. 6: DLC Management Corp.
Its niches may be narrow, but they are deep—deep enough for Tarrytown, N.Y.-based DLC Management Corp. to acquire 4 million sq. ft. of retail space last year (at a combined price tag of $355 million), enough for it to rank sixth on this year’s list.
Those niches are open-air centers in older markets with ethnic diversity that need just a bit of help, and centers in university towns.
“We don’t buy the Triple-A’s, and we don’t buy the C centers and down,” explained Adam Ifshin, president. “We’re operating in this space that a lot of people don’t understand, or have the ability to proceed operationally once they get a project.”
Among its transactions last year were a 10-center acquisition from Edens & Avant, and individual projects through the year.
“We look at every asset and ask, ‘Can we do a unique business plan that will get us the returns we want?’” Ifshin said. The company regularly assesses its capabilities, and literally has a playbook for each stage of future growth.
That’s particularly critical now that the company is adding a new focus—ground-up development. The company formed a development division in 2006, and plans more than $100 million in new projects this year.
New Plan Excel Realty Trust
Property Acquisitions Completed in 2006
|Springdale||Mobile, Ala.||612,616 sq. ft.|
|Fox Run Mall||Glastonbury, Conn.||97,086 sq. ft.|
|Ventura Downs||Kissimmee, Fla.||98,191 sq. ft.|
|Fashion Square||Orange Park, Fla.||36,029 sq. ft.|
|Cobblestone Village||Royal Palm Beach, Fla.||33,207 sq. ft.|
|Tyrone Gardens||St. Petersburg, Fla.||209,337 sq. ft.|
|Building at Tarpon Mall||Tarpon Springs, Fla.||6,580 sq. ft.|
|Augusta West Plaza||Augusta, Ga.||187,823 sq. ft.|
|Conyers Plaza||Conyers, Ga.||171,478 sq. ft.|
|Banks Station||Fayetteville, Ga.||176,451 sq. ft.|
|The Quentin Collection||Kildeer, Ill.||171,179 sq. ft.|
|Marketplace at Matteson||Matteson, Ill.||309,864 sq. ft.|
|Chicopee Marketplace||Chicopee, Mass.||121,420 sq. ft.|
|Greatwoods Marketplace||Norton, Mass.||117,827 sq. ft.|
|Wakefield Commons||Raleigh, N.C.||160,949 sq. ft.|
|Wilkes-Barre Township Marketplace||Wilkes-Barre, Pa.||307,610 sq. ft.|
|Shoppes at Hickory Hollow||Antioch, Tenn.||144,469 sq. ft.|
|Building at Hazel Path||Hendersonville, Tenn.||94,977 sq. ft.|
|Memphis Commons||Memphis, Tenn.||336,638 sq. ft.|
|Shelby Square||Memphis, Tenn.||155,969 sq. ft.|
|Parmer Crossing||Austin, Texas||169,517 sq. ft.|
|Odessa-Winwood Town Center||Odessa, Texas||343,603 sq. ft.|
|Baybrook Gateway||Webster, Texas||236,854 sq. ft.|
|Building at Westpark Shopping Center||Glen Allen, Va.||58,473 sq. ft.|
|4,358,147 sq. ft.|
|Centre at Riverchase||Birmingham, Ala.||132,734 sq. ft.|
|Florence Square||Florence, Ala.||239,516 sq. ft.|
|Tri-City Plaza||Vernon, Conn.||300,038 sq. ft.|
|Amelia Plaza||Fernandina Beach, Fla.||91,727 sq. ft.|
|Five Forks Corner||Lilburn, Ga.||88,646 sq. ft.|
|Tree Trail Village||Norcross, Ga.||99,236 sq. ft.|
|Riverdale Crossing||Riverdale, Ga.||92,786 sq. ft.|
|Indian Creek Crossing||Stone Mountain, Ga.||63,650 sq. ft.|
|Rockbridge Place||Stone Mountain, Ga.||71,268 sq. ft.|
|Northland Plaza||DeKalb, Ill.||297,438 sq. ft.|
|Highland Plaza||Highland, Ill.||107,021 sq. ft.|
|Eastover Plaza||Oxon Hill, Md.||260,092 sq. ft.|
|Namco Plaza||Seekonk, Mass.||101,782 sq. ft.|
|East Park Plaza||Lincoln, Neb.||212,655 sq. ft.|
|East Park Shopper’s Fair||Lincoln, Neb.||67,07 sq. ft.|
|Akers Center||Gastonia, N.C.||240,957 sq. ft.|
|Midtown Plaza||Parma, Ohio||241,223 sq. ft.|
|Fort Steuben Mall||Steubenville, Ohio||823,353 sq. ft.|
|Salem Consumer Square||Trotwood, Ohio||274,652 sq. ft.|
|Winchester Court||Memphis, Tenn.||255,853 sq. ft.|
|4,061,700 sq. ft.|