CHICAGO—It's getting more challenging to find attractive retail deals in the US, and some firms are adopting new strategies. Next Realty, LLC, for example, a Northbrook, IL-based firm, has decided to expand its Next Equity Program, an effort to acquire real estate by providing equity to local partners in select markets throughout the US.
Founded in 1998, Next Realty historically has acquired retail centers and net leased properties, parking facilities and development sites ranging from $5 million to $50 million, having invested over $125 million in equity since inception. In its Next Equity Program, Next will provide up to 90% equity up to $10 million for retail acquisitions.
“America is looked at as a stable business environment, and a whole bunch of foreign money is coming in,” Andrew Hochberg, founder and chief executive officer of Next Realty. This flood started in about 2013, and has greatly increased the competition for desirable properties.
But this program allows Next Realty to expand its operations “not by hiring more people or opening more offices, but by working with local partners,” he says. And the extent of the effort will be based on the qualities of the properties and partners they find. “We have no real ceiling for the program right now.”
“We recognize the need for extensive local market knowledge and on the ground management and leasing expertise,” says Eteri Zaslavsky, managing director, Next Realty. “By putting ourselves in a position to be a significant equity source, we believe we'll be able to expand both our real estate portfolio and our network of real estate investment partners.”
And Next officials also believe their local partners will greatly benefit from forging these relationships. “There is a lot of equity out there,” Hochberg says, “but we also provide strategic advantages.” The firm has long-standing relationships with banks, for example, and proven operational capabilities. “We can do soup-to-nuts with a property. We're an equity partner-plus, not just equity.”
The Next Equity Program is an expansion of an initiative that recently yielded two transactions for Next. Last year an affiliate of Next completed a joint venture acquisition of the Stony Point Shopping Center in Richmond, VA, an 85%-leased, 112,000-square-foot shopping center.
In an earlier transaction, an affiliate of Next acquired of Evergreen Square Shopping Center in Peoria, IL. Evergreen Square is a 110,000-square-foot retail property with a mix of national tenants including T.J. Maxx, Petco, Party City and Dollar Tree. A Kroger shadow-anchors the property. This center was then stabilized through several lease extensions, including one expansion.
“Stony Point and Evergreen Square exemplify the benefits of our partnership equity program,” Hochberg says. “Without the access to local management and leasing expertise of our partners, these acquisitions wouldn't have been as attractive. And our equity contribution helped solidify the capital structure for our partners.”
CHICAGO—It's getting more challenging to find attractive retail deals in the US, and some firms are adopting new strategies. Next Realty, LLC, for example, a Northbrook, IL-based firm, has decided to expand its Next Equity Program, an effort to acquire real estate by providing equity to local partners in select markets throughout the US.
Founded in 1998, Next Realty historically has acquired retail centers and net leased properties, parking facilities and development sites ranging from $5 million to $50 million, having invested over $125 million in equity since inception. In its Next Equity Program, Next will provide up to 90% equity up to $10 million for retail acquisitions.
“America is looked at as a stable business environment, and a whole bunch of foreign money is coming in,” Andrew Hochberg, founder and chief executive officer of Next Realty. This flood started in about 2013, and has greatly increased the competition for desirable properties.
But this program allows Next Realty to expand its operations “not by hiring more people or opening more offices, but by working with local partners,” he says. And the extent of the effort will be based on the qualities of the properties and partners they find. “We have no real ceiling for the program right now.”
“We recognize the need for extensive local market knowledge and on the ground management and leasing expertise,” says Eteri Zaslavsky, managing director, Next Realty. “By putting ourselves in a position to be a significant equity source, we believe we'll be able to expand both our real estate portfolio and our network of real estate investment partners.”
And Next officials also believe their local partners will greatly benefit from forging these relationships. “There is a lot of equity out there,” Hochberg says, “but we also provide strategic advantages.” The firm has long-standing relationships with banks, for example, and proven operational capabilities. “We can do soup-to-nuts with a property. We're an equity partner-plus, not just equity.”
The Next Equity Program is an expansion of an initiative that recently yielded two transactions for Next. Last year an affiliate of Next completed a joint venture acquisition of the Stony Point Shopping Center in Richmond, VA, an 85%-leased, 112,000-square-foot shopping center.
In an earlier transaction, an affiliate of Next acquired of Evergreen Square Shopping Center in Peoria, IL. Evergreen Square is a 110,000-square-foot retail property with a mix of national tenants including T.J. Maxx, Petco, Party City and Dollar Tree. A
“Stony Point and Evergreen Square exemplify the benefits of our partnership equity program,” Hochberg says. “Without the access to local management and leasing expertise of our partners, these acquisitions wouldn't have been as attractive. And our equity contribution helped solidify the capital structure for our partners.”
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