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[IMGCAP(1)]LIVONIA, MI-Schostak Brothers & Co., based here, and German firm BVT Equity Holdings, with US operations based in Atlanta, are forming a joint venture to focus on shopping centers shadow-anchored by major discount department stores. Schostak Brothers had assembled a portfolio of 34 properties, which it will be bringing into the venture, says Patrick Windley, COO of the shadow-anchored division of Schostak.

The joint venture expects to acquire an additional $100 million of centers each year of the venture. The term for the venture is expected to be between five to seven years, Windley tells GlobeSt.com.

[IMGCAP(2)]The focus of the venture will be the acquisition of shopping centers adjacent to newer Wal-Mart Supercenters, or similar national discount retailers such as Target, Windley says. The joint venture allows Schostak to continue adding properties to the portfolio and allows BVT to enter the shadow-anchor market, Windley says.

“We particularly like centers in small to mid-size markets where the Wal-Mart and the retail around it becomes the center of gravity for the entire market and the surrounding area,” he says. The focus on shopping centers offers the venture different exit strategies such as selling the entire portfolio off in the future, selling “small groups” of centers or selling single properties, Windley says. “The flexibility of an exit is attractive to us,” he says. But, “we are not locked into a specific exit or a specific time frame,” he adds.

The 34 properties currently in the portfolio are all shadow-anchored by newer Wal-Mart Supercenters and are nearly 881,000 sf in 14 states, including Texas, Oklahoma, Louisiana, Iowa, Indiana, Florida, Colorado and Arizona, Windley tells GlobeSt.com. Wal-Mart tends to “position themselves well” in markets and there is a “stable of national retailers that also believe in being in the shadow of Wal-Marts, so there is a good built-in demand for space,” he says.

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