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TUSTIN, CA-Tom Gast, former Ralphs Grocery senior vice president and 30-year industry veteran who most recently was president and partner of Phoenix-based De Rito Partners West, has left De Rito to become a principal at Gast Retail Group, a brokerage and consulting service for property owners, retailers and supermarket operators. Gast Retail Group was founded in 2004 by Gast’s wife, Lori, an industry veteran who formerly was vice president and director of Leasing for GVD Investments and Dicker Warmington Properties, which developed some of the first power centers in Southern California, including the 80-acre Plaza at Puente Hills and 45-acre Fullerton Towne Center. Gast’s clients include Donahue Schriber, Hopkins Real Estate Group, NewMark Merrill Cos., Red Mountain Retail Group, Watt Management Companies and Wilson Commercial Real Estate, plus a variety of chain and independent supermarket operators.

Throughout his career, Gast was responsible for acquiring, developing and disposing of hundreds of grocery stores as well as numerous remodels and store expansions. At Los Angeles-based Ralphs, a division of the Kroger Co. of Cincinnati, the nation’s largest supermarket chain, Gast was responsible for overseeing new and existing store development projects for Ralphs supermarkets and Food 4 Less stores in California and Nevada. His responsibilities included property management, surplus property dispositions and the procurement of supporting backside warehousing and distribution facilities for both formats. In his former post at De Rito Partners, Gast was responsible for all new development and acquisition activities in California and Nevada for the Phoenix-based firm, which has developed 19 retail properties exceeding five million square feet.

Commenting on today’s market conditions, Gast says that expectations of shopping center owners, retailers and lenders “must change in order to survive” in today’s tentative and unpredictable economy.” Landlords continue to struggle with conditions such as the depreciation of their assets, declining rents and tenants that close or file for bankruptcy.

Nonetheless, Gast says, “Solutions are possible with realistic and candid approaches by all parties.” Among the services that Gast Retail Group offers is helping to develop solutions for commercial retail properties “at a time when leasing activity is difficult and anchor tenant plans are uncertain,” Gast says.

Among the changes wrought by the weakened economy is that the supermarket industry has undergone a significant transformation, according to Gast. He points out that economic pressures, coupled with the growing presence of new competition from deep discount retailers and smaller niche operators, “have forced the conventional supermarket chains to rethink how they go to market.” He says that the biggest challenge for grocery operators in managing these unprecedented changes is to be able to control costs effectively, lower prices and determine the right merchandising mix to remain profitable.

Gast argues that lenders must be flexible with borrowers whose properties remain vulnerable to refinancing and more stringent credit underwriting requirements. He points out that repossessing overvalued assets “threatens solvency as bad loans are written off, leaving the lender with a variety of numerous distressed assets it is incapable of effectively managing.” On the other side of the coin, he says, the potential for investors to acquire distressed properties in the near future is great. He says these properties “will be attractive investments offered at significant discounts with tremendous upside potential over the long term as the market restabilizes once again and begins to grow.

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