Diversify & Conquer: Inland’s Acquisitions

CHICAGO — From recession and e-commerce’s disruption through COVID-19, the retail sector has required adaptation, with investment companies having to evolve right along with the challenges and changing times. According to Mark Cosenza, Inland Real Estate Acquisitions SVP, the company’s acquisition strategy is diversification – grocery anchored retail, multifamily, self-storage, healthcare related assets, student housing and industrial.

“A big reason why we’ve evolved with such expansive diversification into other asset classes, especially over the last two COVID-19 years, is that we’re really trying to figure out what the retail landscape looks like,” Cosenza said. “And our investor base essentially said we want to see a larger menu of alternatives, which is where the evolution comes into play. Being able to evolve and expand into other sectors has helped us reach the $50 billion acquisitions mark, a big milestone.”

“Growing a new storage platform in five years’ time to 125 storage facilities exemplifies we are bullish on self-storage,” Cosenza said.

Inland has also added medical office building investments, mostly the single-tenant NNN plays with credit leases. Industrial real estate is also a hot target, with the company acquiring a couple of large Amazon fulfillment centers over the last year, as well as two “Last Mile” warehouses, with a goal to add more. Inland is also expanding into senior and manufactured housing.

“All of this is due to the evolution of our investor base that has grown on the 1031-exchange side of the business,” Cosenza added. “We don’t have an end in sight regarding our appetite for all of these different asset targets.”

Retail has certainly felt the impact of the pandemic, but Inland’s SVP also points to the expansion of Amazon and the sector’s overall omnichannel path as reason for CRE circumspection. Just walk into a Whole Foods, Nordstrom or Best Buy and it doesn’t take long to spot the pickup order area. Inland’s main retail acquisition this year is a $300 million long-term NNN grocery portfolio deal of 13 Stop & Shop supermarkets in the northeastern U.S.

“We feel very comfortable in the triple-net grocery space, and grocery stores continue to evolve and provide an entire experience with Starbucks, seasonal nurseries, prepared meals, pharmacies and more,” Cosenza said.

Technology continues to speed up acquisition deals. Since inception, Inland’s acquisition team – which also includes Joe Cosenza, vice chairman of The Inland Real Estate Group and president of Inland Real Estate Acquisitions, and Matthew Tice, SVP of Inland Real Estate Acquisitions – has generated more than 3,700 transactions across 49 states, and this year-to-date has done $1.9 billion in acquisitions. Cosenza and his team increase their data capture and knowledge base in a quicker and easier way.

“When talking acquisitions, speed is everything,” he said. “It’s always about speed to market. Everyone’s being asked to move quicker and quicker, but we’re still very thorough with our due diligence before agreeing to do a deal.”