SAN DIEGO—As tenants look to expand or relocate and seek a better cost alternative, they're looking outside the CBD for environments with strong internal and external amenities, Westcore Properties' Rob Sistek tells GlobeSt.com. Sistek recently joined the firm, an active investor in industrial and office properties, as its COO, working with chairman Marc Brutten and president and CEO Don Ankeny to oversee acquisitions, leasing, portfolio management, capital allocation and investment strategy.

Most recently, Sistek served as CFO and EVP, investments for Innovative Industrial Properties, where he led the closing of $45 million of acquisitions and related leases, as well as the accounting, finance, treasury and investor-relations functions, including the successful execution of the company's IPO and listing on the New York Stock Exchange.

We spoke with Sistek about his goals at Westcore, acquisitions strategies in office and industrial and leasing trends in these sectors.

GlobeSt.com: What are your goals in your new role with Westcore?

Sistek: Westcore has done a great job of putting together a strong team of investment professionals. My new role involves working with the team to drive financial performance, understanding our core strengths and expanding our capital relationships.

GlobeSt.com: What are some smart acquisitions strategies in today's competitive office and industrial markets?

Sistek: We are in an extremely competitive acquisition environment. Across the commercial real estate industry, fund raising was a little slower in Q3; however, there was still a lot of dry powder looking for good investment opportunities. It's challenging to find great product.

With respect to smart acquisition strategies, identifying trends at the macro and micro levels and understanding how they impact users and how they conduct business is key—understanding supply and demand and being able to identify markets where there is opportunity. It's important to focus on relationships with tenants and brokers to identify investment opportunities and the ability to expand in a market. Westcore has had success as a value-based investor, and it's important to continue to be disciplined and identify functional real estate in a market, as well as good location.

GlobeSt.com: What leasing trends are you noticing in these sectors?

Sistek: Regarding industrial, in the markets that we're in, leasing is tighter than any of us have ever seen in our CRE careers. In a lot of the markets Westcore is in, particularly the coastal markets, vacancy is inside 1%. There's a lot of demand for space, and it's a landlord's market. The challenge is understanding rent growth and how to price your real estate effectively, pricing product to users and maintaining good relationships.

In office, Westcore has been more opportunistic. We're seeing opportunities in suburban-office product that's capital intensive. It's more competitive for acquisitions in strong CBD markets, where we continue to see rent growth. For that type of investment, the strategy should be really focused on smart capital allocation in terms of location. This is market dependent; as tenants look to expand or look for new space or look for a better cost alternative, they should look outside the CBD. If you create an environment where there are amenities either within the building with a good fitness center or outdoor collaborative space, that is capital intensive for the landlord, but could present a compelling opportunity.

GlobeSt.com: What else should our readers know about the current CRE financing environment?

Sistek: The financing environment is still really robust, with great access to both debt and equity capital. Lenders are cutting back on proceeds and being more selective, but pricing is still really tight when they find an opportunity that's interesting with a strong sponsor. Westcore benefits from that. Accessing our relationships and having them know the strength of the sponsor is key. But where banks have pulled back, alternative lenders have come into the market to provide more proceeds to fill the financing gap.

Instant Insights /

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