ShopOne Launches New REIT With 46 Assets Across Eight States

by Camren Skelton

NEW YORK — ShopOne Centers REIT Inc. has launched a new shopping center ownership entity under the leadership of retail real estate veteran Michael Carroll.

The private real estate investment trust will focus on acquiring, operating and managing grocery-anchored shopping centers in dense, geographically diverse areas. Davidson Kempner Capital Management LP owns a majority of ShopOne’s equity.

“We have a really good capital partner in Davidson Kempner, who has been an active investor in the space from both the debt and asset level,” says Carroll, who serves as CEO of ShopOne. Carroll is the former CEO of Brixmor Property Group. “We are the first platform/portfolio company investment that they have made.”

ShopOne is entering the retail sector with a portfolio of 46 shopping centers spread across eight states, including more than 4.7 million square feet of gross leasable space, the majority of which were acquired from Devonshire REIT Inc.

“There were properties that were housed in the operating partnership of Devonshire, and we bought that operating partnership,” says Carroll. “There are Devonshire entities out there that still have a business, but we have migrated the assets that were in their operating partnership into a new entity under the ShopOne banner.”

Carroll and his team are focused on centers that have thriving grocery, restaurant and fitness tenants. ShopOne will be investing in centers that have strong tenants in these areas, as well as centers that have room for increased revenue opportunities through leasing to healthy tenants who are performing well in today’s economic climate.

“We believe strongly in the long-term fundamentals supporting continued investment in shopping centers anchored by top-performing grocers, leading discounters and off-price apparel retailers,” says Carroll. “We intend to be very active in the market as we seek to grow our portfolio and gain scale in high density, infill metro areas.”

In line with that strategy, the company acquired Conyers Commons, a 118,410-square-foot power center in the Atlanta suburb of Conyers, Georgia. Target anchors the center, which is also home to Ross Dress for Less, Kirkland’s, Mattress Firm, FedEx Office and Panda Express.

ShopOne is looking to take advantage of value-enhancing redevelopment and leasing opportunities in fundamentally strong markets across the country.

“My background has generally been in redeveloping and repositioning properties, and we are really looking for those kinds of opportunities where we can bring that expertise to create additional value,” says Carroll.

The company is looking to capitalize on dislocation in the retail marketplace by acquiring assets at attractive values and enhancing net value through operational and capital improvements. While growth is certainly a goal for ShopOne, the firm’s priority lies in building an institutional caliber company supported by top-of-the-line operating platforms and systems, says Carroll.

“If we have a company that can report at an institutional level, operate at an institutional level and build best-in-class systems, that gives us a lot of options down the road,” he says. “Whether we take it public, whether we partner with another institution or whether we partner with another public company, we have lots of options if we run an institutional caliber platform.”

— Camren Skelton

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