JV of Prudential, Pacific Castle to Invest $500M

The joint venture will be looking for deals in the range of $25 million to $100 million, with its sweet spot at about $50 million, Astarabadi says. The new venture will consider both value-added and stabilized deals "as long as the property offers the upside that we look for, of an IRR in the mid-teens or better," the Pacific Castle president tells GlobeSt.com.

Astarabadi calls the JV "a unique platform" that will enable the Irvine-based firm to close deals in as little as 10 days, and to acquire a single property or large portfolios on an all-cash basis. The JV, which runs through the year 2013, plans to acquire the properties over the next several years and will concentrate on assets in California and Nevada.

Pacific Castle, which is especially interested in acquiring ethnically oriented shopping centers, already owns a portfolio of approximately $300 million of retail assets and has recently closed two deals through the new JV with Prudential. In the past, the company has typically acquired properties with a combination of its own capital and equity from high-net-worth individuals, about 80% of them Asian-American investors, Astarabadi notes.

The two deals that Pacific Castle has already closed through the new JV include one ethnic center, Bay Plaza in National City near San Diego, and a Target-anchored center called Rancho Cordova Town Center near Sacramento. It bought the 123,000-sf Bay Plaza from Safco Capital for approximately $25 million and the 270,000-sf Rancho Cordova Town Center from Passco Cos. for approximately $27 million.

Bay Plaza, located at 1410–1430 E. Plaza Blvd. in National City, is at the heart of the planned redevelopment of Filipino Village. Catering to the city's Filipino population, the center's major tenants include Big Lots, JoAnn's Fabrics (not a part of the center), Seafood City, IHOP Restaurant and Goldilocks Bakery.

The Rancho Cordova center is at 10801–10937 Olson Dr. in Rancho Cordova, a suburb of Sacramento. The center's major tenants include the Target (not a part of the center), Pier 1 Imports, Michaels, Fallas Paredes, Citiwear and Anna's Linens.

In the Bay Plaza transaction, Reza Etedali and Ramez Barsoum of Irvine-based Reza Investment Group represented both the buyer and the seller. In the Rancho Cordova deal, the buyer and the seller were represented by Ed Hanley of Irvine-based Hanley Brown Group Real Estate Advisors.