GBT Realty is making one of its biggest bets yet on retail. The 39-year-old developer has raised $1.3 billion for built-to-suit retail development and shopping center acquisitions—and plans to deploy those funds within the next 18 months fully.
"Historically, GBT's bread and butter has been retail," CEO Brian Dawson tells GlobeSt.com.
Over the past decade, the company has built a sizable retail footprint that includes 850 Dollar Generals, 51 Walmarts, nearly 30 Targets and dozens of the following: Firestones, Sprouts Farmers Markets 7-Elevens, as well as apartments, offices and urban mixed-use projects.
"But the founder, George Tomlin, and I made a conscious decision to have the primary focus at GBT moving forward to be on retail, developing shopping and power centers, developing triple-net retail, and also acquiring existing shopping and power centers," Dawson says.
Dawson, who became CEO last May after more than three decades on the capital markets side at JLL, says returning to pure retail development was irresistible.
"It took a special opportunity and special people to pull me from JLL, the capital side, where I was for 35 years," he says.
The $1.3 billion commitment is already at work.
"For example, we have two great, wonderful sites in Nashville," says Dawson. "One is a mixed-use development. Another is a site that will be a hotel and condo. Those are more one-off opportunities that we have. This retail focus is a significant component to what is driving GBT at this time."
That focus is grounded in a fundamental change in retail's supply-demand balance. Coming out of the financial crisis, Dawson says, the market struggled with an "oversupply hangover."
"But it took a long time to work through and get to that point and to work through the overhang of supply," he notes.
"Retailers have been in a very advantageous position to take advantage of dislocation in the market. The market is now normalized. We're seeing real rent growth, and demand continues because retail is a major player in the food chain and will be moving forward. This is the first time in my career seeing the capital allocators in the world [are] all saying, 'Retailing is a desired food group for us, both existing and development in the right locations with the right partners and the right retailers.'"
GBT has already been deploying capital for six months with its key partner, AEW Capital Management of Boston and expects to complete within the next 15 to 18 months.
"We have a significant pipeline. We have retailers we're working with. We'll start construction this year on 33 projects," Dawson says. "At the end, the GBT will own all of the projects."
A second phase is already in view. "We have relationships beyond the initial wave, and we have capital aligned to do it again," Dawson says. "We have the next three to five years of pipeline, retailers, and capital aligned to implement this."
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