Mall portfolios may be scarce and construction costs still skyrocketing, but new investment vehicles are sprouting up across the country, looking to bury billions of dollars in retail real estate.
Kite Realty Group Trust, which went public in August 2004, is a toddler in the real estate investment trust world but has managed to hook up with the massive Prudential Real Estate Investors group to invest up to $1.25 billion in developing and acquiring community shopping centers. Kite plans to manage any retail project taken on by the joint venture.
Refugees from other REITs are collaborating as well. Robert Manarino, a former executive with Cousins Properties Inc., a diversified REIT based in Atlanta, recently formed a new retail development company to build retail projects in Southern California and the western U.S. Manarino Realty has secured financial backing from Dick Ziman and Victor Coleman, former executives with Arden Realty — once one of the largest office REITs in California but recently acquired by GE Real Estate — and Los Angeles-based developers John Long from Highridge Partners and Jack Mahoney of Summit Commercial Properties.
And while these upstart developers are focused on building their business, Kimco Realty Corp. has been busy making its already massive real estate business even bigger. Kimco, which focuses on community shopping-center development and has been a player in private equity deals, announced Oct. 31 as the closing date for the $4 billion merger between it and Pan Pacific Retail Properties. Kimco plans to pay $70 per share for Pan Pacific, which focuses on retail along the West Coast.