Retail Investors Stick to Daily Needs Strategy

LOS ANGELES—Ares Capital and Citivest Commercial Investments have purchased two retail properties in California, the Temecula Town Center and the Downtown Novato Center. The properties were purchased through a fund managed by the two investors. Both properties are anchored by grocery stores and are in high-traffic intersections. The terms of the transactions and the price were not disclosed.

"These are suburban infill centers that you can't replicate," Larry Weese, president of Citivest Commercial Investments, tells GlobeSt.com. "They are busy centers that have a lot of traffic and are surrounded by residential. We have been visiting both of these centers for years, and have been tracking them since they have been built."

The Temecula Town Center is shadow anchored by the only Target store in the area, and is anchored by a Vons supermarket. The property also houses a HomeGoods, CVS and a 24-hour Fitness. "The Temecula property was bank owned," says Weese. "We know the property very well. It has been neglected and needs a minor facelift and a little bit of repositioning and releasing. It will be bright and shiny by the time we are finished, and it will be a better place to shop." The property is 93% leased.

Located in San Francisco's North Bay, the Downtown Novato Center is a 98,000-square-foot retail center anchored by a Lucky Supermarket and a CVS. "The Northern California property is smack in the middle of town, and the demographics are great," adds Weese. "You can only develop 50% of the land in that county, so the barriers to entry are high. We bought it from the original owner, and it needs to be renovated and brought to today's standards."

The investors plan to execute a value-add strategy on both properties, holding the properties for five years. Weese says that they have not yet determined the amount of capital they plan to spend, and are still in the planning phase on both assets.

Citivest partners with several firms on real estate retail acquisitions like these. It recently partnered with Angelo Gordon Real Estate to purchase a San Diego-area nine-property retail portfolio for $183.25 million.