LAGUNA HILLS, CA—Heslin Holdings plans to invest $100 million in value-add commercial property acquisitions in the Western U.S. in 2015. As GlobeSt.com recently reported, the firm has acquired 1640 Rio Rancho Blvd., a retail property in Rio Rancho, a city within the major metropolitan region of Albuquerque, and has plans to redevelop it. We spoke with the firm's principal and CFO John Belanich about the properties it hopes to acquire and the reasons behind this objective.

GlobeSt.com: What types of properties are you looking to acquire?

Belanich: We are really not restricted to retail. Our experience is in retail, office and more recently hotels. We're more opportunistic and look for acquisitions with a value-add component. For retail, that means either a lot of vacancy or underutilized tenants. We'll do an expansion, demolition and remodel—the whole gamut. We've done a mix of that our whole careers—that's our focus. We also like the property to be below replacement cost even after capex so we can compete with rent. That's the business plan in a nutshell.

GlobeSt.com: What areas of the Western US will you focus on and why?

Belanich: We generally like to stay in the top 50 MSAs, including Albuquerque and Denver. We're not big on tertiary markets; we like reasonable, but stable, growth. One of the big issues is reasonable housing costs for employees. So we don't go L.A. large, but we want some significant population centers. We own properties in the Portland MSA, Seattle, San Francisco and Southern California—mostly suburban, but a couple of urban assets.

GlobeSt.com: What's behind the objective to invest $100 million—what does it do for your firm, and why this amount?

Belanich: Our total portfolio combined is about $500 million, give or take, and we're continuing to add to that. There are some properties we purchased for rehab and are looking to sell in the next 12 months so we'll have continued expansion of our portfolio and capital available for our investments.  It's a challenge to find deals we like. We have to scrub a whole lot of deals to find those with significant upside and limited downside.

GlobeSt.com: What else should readers know about these acquisition plans?

Belanich: It really is dependent upon the property. One of the things that's critical is to create a property that's appropriate for our tenant and customer base. It's a little dependent on the types of tenants and what they are willing to pay, and it goes from a moderate façade upgrade to knocking down older buildings and building nicer buildings to something a little bit more involved than that like adding entrances and architectural features to attract the eye. We plan to use the next three to six months with this Albuquerque property to determine whether it should be leased to one, two or three tenants. If they're higher-end tenants, they're going to want a higher-end-looking building. So what we do is dictated by the types of tenants the property attracts or will be likely to attract in those markets.