Institutional CRE Investment to Increase in 2019
Stos Partners expands its investment sales platform to include institutional sales due to growing demand.
“Our new institutional-capital initiative allows us to build upon our already successful private-capital investment platform while branching out into an area of the investment arena that is ripe with potential,” CJ Stos, principal of Stos Partners, tells GlobeSt.com. “The institutional market is gearing up to target an increased number of commercial real estate investments this year and a “good deal” is getting harder and harder to come by. These firms have money to place and are looking to leverage local market relationships to uncover attractive opportunities.”
Stos’ recent institutional deals have been a successful foray into this new market, and they will be a catalyst for like acquisitions this year. “With these institutional deals under our belt, combined with our deep knowledge of, experience in, and relationships in the industry, we believe we can help these companies take a more proactive approach to deploying capital and feel now is the perfect time for us to launch this platform,” says Stos.
Stos Partners made its first purchase outside of Southern California with the acquisition of the industrial property in Laredo, Texas. This year, it plans to focus on institutional product in Southern California and Texas. “We consider our Laredo purchase a new and exciting direction for our company,” says Stos. “Laredo’s location as the busiest commercial port of entry in the U.S. is appealing to us, and we are attracted to the market’s tightly controlled supply. We are also studying high-growth markets all over the country in search of acquisition deals that make sense for us.”
Of course, the firm is a seasoned investor with private capital. It has transacted more than $280 million in the last 12 months, largely through its existing investment platform. This new institutional platform is meant to augment its existing private business, but Stos says that the expansion will have little impact on its private investment business. “Our institutional-investment platform won’t affect our private-capital platform or activity from the private-capital sector,” he says. “That initiative will continue to perform and grow, and we will continue to focus on it as interest in the commercial real estate sector from private companies and individuals heightens. We know our experience in this arena keeps our finger on the pulse of the local market and will give us a competitive advantage in the institutional marketplace.”
In fact, Stos sees that focusing on both capital pools is necessary for future success. “As the economy remains robust and the commercial real estate industry as a whole continues to flourish, we are increasingly convinced that focusing on both platforms is the smart move for the foreseeable future,” he adds.
While the firm has some experience in institutional transactions as of late, Boyle’s leadership will play an important role in this new platform. He has extensive institutional investment experience, including facilitating more than $2 billion in office and industrial deals in his career at Locale Advisors and Eastdil Secured. “His breadth of knowledge and solid relationships in that field make us confident in his ability to lead this new division to success and allow us to expand our reach both geographically and in terms of transactional scope,” adds Stos. “Jay’s expertise in the institutional realm, combined with Stos Partners’ existing traction in the private-capital realm, make for an unbeatable combination. His pedigree adds another layer to our products and services and essentially rounds out our offerings to investors.”
This year, Stos is aiming for a similar sales volume as it accomplished in 2018. “We also plan to seek out larger transactions like the $88-million Laredo portfolio that align with our investment criteria and areas of expertise,” he says. “The new platform really widens the range of possibilities for our company and allows us to spread our wings as we leverage our strong cache of experience along with renewed capital sources to continue to grow.”