IRVINE, CA-Bixby Land Co. has sold three shopping centers in Long Beach, CA totaling nearly 273,000 square feet to retail REIT Equity One Inc. of North Miami Beach, FL for $72 million as part of Irvine-based Bixby's strategy of divesting its retail assets in favor of industrial properties. Bill Halford, president and CEO of Bixby, tells GlobeSt.com that the company will now be looking to reinvest the proceeds of the Equity One sale into industrial properties in core California markets.

Halford explains that the sale to Equity One continues a repositioning strategy that Bixby began more than four years ago when Halford joined Bixby after 12 years at the Irvine Co., where he had been president of that company's office properties division. The strategy was designed to divest retail properties, which represented approximately 50% of Bixby's assets at the time, and to reinvest the proceeds of those sales into industrial properties. It was also designed to geographically diversify the company's holdings, roughly 90% of which were in the Long Beach area at the time.

With the sale of the three Long Beach shopping centers to Equity One, Bixby has nearly completed its transition to industrial ownership, with about 90% of its assets now in the industrial sector. The three properties that Bixby sold to Equity One are known as the Circle Centers and are in the retail hub of the Long Beach traffic circle at the intersection of Pacific Coast Highway, Los Coyotes Diagonal and Lakewood Boulevard. The centers are 97% leased, with a tenant roster that includes Vons, Ross, Rite Aid, Ralphs, Ross Dress for Less and Marshalls.

Halford tells GlobeSt.com that, over the past four or five years, Bixby has nearly achieved its repositioning and geographic diversification goals by buying or selling more than $500 million of properties, not including the $72 million sale to Equity One. Today its portfolio is distributed throughout California, with a few assets in Phoenix and one building in Las Vegas.

Halford, a longtime member of the Bixby board, explains that he and the other board members set out on the repositoning strategy for a number of reasons. "We are a private REIT, and in our view the dividend flows tend to be smoother in industrial," he says. In addition, Bixby's senior management team, although its members had all been involved in retail, had much more experience in industrial, which is also a bit less management intensive than retail.

Halford notes that the three Long Beach centers attracted strong interest from a number of public companies because of the lack of good core retail assets for sale, combined with the cash that many REITs have raised through stock offerings or debt issues. Three public companies ultimately were in the running for the deal, in which Bixby was represented by Todd Goodman of CB Richard Ellis.

"These are centers that we wouldn't have sold if we wanted to stay in retail," Halford pointed out. "The fact that we could sell them and probably get 100 basis points spread in return as we reinvest into industrial is a good move for our NOI as well as for our shareholders."