LAS VEGAS—More than $400 million in retail properties will go on the block in the coming weeks as Oak Brook, IL-based RPAI continues to shed prime assets that no longer fit its strategic vision. As GlobeSt.com has reported, the REIT plans to trim down from approximately 60 markets to 10 to 15 over the next decade while upping its holdings in core MSAs. “We believe we can drive long-term value by operating a more geographically concentrated portfolio,” says VP and director of investments Michael Hazinski, who describes the firm's progress to date as being “in the middle innings of the 10-year plan to optimize our portfolio.”

The goal this year is to shed $500 million in assets, and more than $400 million of those will be on the block before the RECon conference fires up in May. It's appropriate then that three of the newly listed assets are based here, and Hazinski explains why now is the right time for a Vegas sale…and for that matter, a Vegas buy for what he describes as a “broader pool of investor interest than we've seen in the past six to 12 months."

“Vegas continues to gain momentum,” he explains, “especially over the last several quarters. Unemployment is down 200 basis points year over year and Vegas saw its highest tourist count in 2014, north of 41 million visitors. In addition, Nevada as a state last year was ranked in the top three for population and job growth. All of these are very good indicators for retailers and looking to add stores and, in turn, for institutional and private buyers seeking to expand their shopping center portfolios.” 

The three Vegas assets the REIT is shedding are located throughout the Las Vegas MSA, with average three-mile demographics of over 102,000 residents and average annual household incomes above $60,000. Broken out individually, they are:

• Best on the Boulevard, “which is only two miles off the strip in Central Las Vegas,” says Hazinski, is 100% leased. The 204,000-square-foot community center is home to such retailers as Seafood City, Best Buy, Ross and Party City. RPAI has owned the asset since 2004.
• Built by RPAI in 2008, the 223,000-square-foot Lake Mead Crossing is located in Southeast Las Vegas. The shopping center is 85 percent leased with Target as the shadow anchor, and is home to Pet Smart, Ulta and Marshalls.
• Montecito Crossing in Northwest Vegas is 95% leased with Kohl's as shadow anchor. HomeGoods, Pet Smart and Ulta are located here, in a 180,000-square-foot asset owned by the REIT for almost 10 years. All of the properties are being offered “free and clear of debt,” says the VP.

As RPAI continues its 2015 selling plan, it is divesting of assets in such states as Montana, Kansas, Oklahoma and Nevada. But dispositions are only half the story, and Hazinski reports what is taking place on the buy side: “We've already announced over $370 million in acquisitions in our target markets, including Washington, DC; Austin; and Seattle, with the majority of these being off-market deals. On the disposition side of the equation, we continue to be active portfolio managers, balancing asset-level risk with broader market fundamentals.”

In other words, RPAI continues to work the plan.