Tom Jahncke, Passco's senior vice president, says the company will invest $80 million of equity to obtain the $250 million in retail properties. The investment firm, which specializes in investing with 1031 Exchange buyers via tenant-in-common transactions, already owns about $300 million of retail properties, comprising three million sf of mostly grocery-anchored neighborhood centers in Southern California.

The $80 million in equity works out to 32% of the value of the properties that Passco's targeted, meaning it will hold debt at a ratio of about 68% on the acquisitions. Jahncke tells GlobeSt.com that those ratios of equity and debt are fairly standard today for Passco, which is typically leveraging its deals conservatively, at around 60% to 65%.

The centers Passco are targeting in the new round of acquisitions are malls as opposed to neighborhood shopping centers, but it will still stick mainly to Southern California properties. Jahncke says, however, that the company does look at prospective buys in select Northern California markets, like San Francisco and Sacramento.

Jahncke says opportunities exist to improve the performance of existing malls through renovations and repositioning. "Typically the properties we buy are not major physical turnarounds," he explains, noting the centers may need some renovations and modernization. An important part of its strategy is upgrading the tenant base, often by bringing in higher quality national tenants.

The firm's targeted buys usually are at least 85% to 90% occupied. Among Passco's existing retail assets in California are the Lancaster Commerce Center in Lancaster; Rolling Ridge Plaza in Chino Hills; Sierra Vista Plaza in Murrieta; and Belle Mille Landing in Red Bluff.

Jahncke says Passco also plans to add some multi-tenant industrial properties to the portfolio by midyear, up to about $50 million worth. It's been some time since it held multi-tenant industrial as an investment, he says, noting it developed and then sold some projects. Through affiliates such as Stowe-Passco Development LLC and Passco Development LLC, the company now has industrial projects under way in the Inland Empire communities of Rancho Cucamonga and Norco.