Collins: "Good deals are always going to be in high demand, but we are getting our share." Collins: “Good deals are always going to be in high demand, but we are getting our share.”

OAK BROOK, IL—Since becoming a self-managed REIT in 2014 and rebranding as InvenTrust Properties Corp., the company has focused on building a strong portfolio with both core assets and value-add opportunities. InvenTrust has concentrated its acquisitions activity on 18-hour cities located primarily in the Sunbelt – markets with strong job and population growth. To capitalize on redevelopment opportunities in its existing portfolio and to pursue additional value-add prospects, InvenTrust has been adding to its bench strength by hiring additional resources and moving existing talent to locations within its growing markets. GlobeSt.com sat down with Dave Collins, EVP of portfolio management at InvenTrust, and David Joss, who recently joined the firm as VP of development and construction, for an exclusive interview on the implementation of this new direction.

GlobeSt.com: Tell me about your current investment strategy and how it has evolved this cycle.

Dave Collins: We have a portfolio that we have owned for a number of years that was very stable. About two years ago, we began an aggressive program of capital recycling. We embarked on an initiative to sell out of secondary and tertiary markets where we knew we would only own one or two assets, and we concentrated on the Sunbelt states with high job-growth and high population-growth markets, basically Southern California, Arizona and Texas, Florida, Georgia, the Carolinas and up to suburban Washington, DC. We are continuing to sell out of one-off markets that are smaller and don’t have a lot of scale, with less opportunity to add value. We have recycled quite a bit of our portfolio in the last two years, and that will continue for the next couple of years.

GlobeSt.com: Did you make these decisions as a result of shifts in the market, or because of a new direction that you wanted to take internally?

Collins: There are always changing market conditions. We took a strategic approach after evaluating our business model.  When we became self-managed in 2014, we recognized the need to direct our portfolio concentration in the highest-growth markets. We looked to grow our portfolio with the best properties, in the best locations within the best markets.

GlobeSt.com: Your new focus markets are much more active. How have you dealt with competition in these new areas?

Collins: There is always a lot of competition, and there is certainly a lot of money out there. If you look at our portfolio, we are about 40% grocers and 60% power centers. We have a very strong network, and our acquisition team has a lot of bench strength. We are very well known in the industry and I believe we have built a very strong reputation in a relatively short period of time. Good deals are always going to be in high demand, but we are getting our share.

Joss: Joss: "This focus also enables our acquisition team to secure assets with value-add opportunities, which is really exciting." Joss: “This focus also enables our acquisition team to secure assets with value-add opportunities, which is really exciting.”

GlobeSt.com: Speaking bench strength, how have you built it and recruited new talent to support this strategy?

Collins: We have been building our bench strength across the platform, and we have a relatively new team here in several areas. We are hiring really good talent and taking existing talent and making sure they are in the right locations and have the right resources. When we look to our development, redevelopment and value-add group, we have recently hired Neal Soskin, who had a number of years with Weingarten Realty in senior positions. Neil brings us a good deal of operational and development strength. Our most recent hire, Dave Joss, came to us from Federal Realty Investment Trust.

David Joss: What is great about InvenTrust is that we are expanding efforts to create value in our portfolio by developing, redeveloping and re-tenanting shopping centers in our key growth markets. That’s the sweet spot of my background. I have 14 years of development experience in the public retail REIT sector, and over nine years of that was with Federal Realty Investment Trust where I worked on development, redevelopment and large re-tenanting efforts. This focus also enables our acquisition team to secure assets with value-add opportunities, which is really exciting. To execute these opportunities, we have a strong team in place that really knows retail. I think we are in a good position going forward.

GlobeSt.com: The retail market has seen a lot of change in recent years. How is the portfolio that you are building helping to deal with these market challenges?

Collins: Retail has been in the press a lot of late, and there certainly have been many discussions about retail bankruptcies and challenges with e-commerce. One of the things that I keep coming back to is that if you have good real estate, you can weather almost anything. Our strategy has been to own really good quality real estate in high growth markets, so when we do have stores closing due to  bankruptcies, we are able to backfill the space and in some cases, get better rents. It can actually be a positive. On the value-add side, our returns are solid, and we feel very strongly that we are going to identify a number of opportunities over the next 18 months.