RPT Realty has formed a new core net lease retail real estate platform with co-investors GIC Private Limited, Zimmer Partners and Monarch Alternative Capital LP.
GIC, Zimmer, Monarch and RPT have committed to fund $470 million in the platform over the next three years for approved acquisitions, including the initial investment portfolio that is to be seeded by RPT.
RPT said the platform will target the acquisition of over $1.2 billion of strategic assets, creating a scalable, stable-growth investment platform.
The platform will seek to acquire net lease retail assets, including assets that have been sub-divided from a select set of currently owned RPT open-air centers as well as future RPT acquisitions.
“We believe the current dislocation in the open-air retail sector compared to the triple-net lease sector has created unique investment opportunities based on our extensive analysis. Retail is a prime driver of the U.S. economy, whether delivered through ‘brick and mortar’ or online, and both require a strong infrastructure to drive results,” said Brian Harper, President and Chief Executive Officer of RPT Realty.
The platform is to be seeded with 42 single-tenant, net lease retail assets (Initial Seed) that have been or will be created by RPT upon the subdivision of certain parcels from its existing open-air shopping centers located in top 40 metropolitan areas.
The Initial Seed was valued at $151 million and represents only 6% of RPT’s fourth quarter 2020 annualized base rent. The Initial Seed is expected to close in phases.
RPT will retain a 6.4% stake in the Platform, will maintain day-to-day management of the portfolio and will earn management, leasing and construction fees.
Additionally, RPT will invest up to $70 million in preferred equity that will be a component of Zimmer and Monarch’s equity commitment and will not be a direct obligation of the platform.
“As a long-term investor, we believe there are opportunities in the retail net lease sector to acquire high-quality assets with strong tenant credit at attractive pricing. We expect to create value in identifying pricing inefficiencies between different tenant and property types within the retail sector. We are pleased to grow our strategic partnership with RPT, and look forward to scaling the joint venture together,” said Lee Kok Sun, Chief Investment Officer of Real Estate, GIC.
”The current retail real estate environment is fast moving and at an important crossroads.”
Steven Frankel, Principal and Head of Real Estate at Zimmer, said, “The current retail real estate environment is fast moving and at an important crossroads. We chose to partner with RPT because of their commitment to operational excellence and demonstrated ability to capitalize on strategic opportunities. We are excited about the possibilities.”
Ian Glastein, Managing Principal at Monarch, said, ”Through our long-standing approach of identifying attractive risk-adjusted investment opportunities across asset classes and working with experienced and accomplished partners, it became evident to us that partnering with the RPT team provides the ability to accomplish both of these goals.”
RPT Realty hires Tyler Sorenson as Managing Director for retail real estate platform
RPT Realty has hired Tyler Sorenson as Managing Director to lead investments for its newly formed core net lease retail real estate platform.
Sorenson joined RPT from Spirit Realty Capital, where he most recently served as Vice President of Acquisitions. In this role, Sorenson oversaw nearly $1.5 billion of retail acquisitions over the past two and a half years.
Prior to leading Spirit’s retail acquisitions Mr. Sorenson was Vice President, Asset Management where he was responsible for leading a team that managed a portfolio of approximately 800 net-lease properties.
Sorenson has more than 16 years of shopping center and net lease experience including roles at GE Capital and Regency Centers, where he developed a strong reputation among leading franchisees, retail operators, brokers, private equity sponsors and investment bankers across the real estate industry.
“I share Brian and RPT’s vision that this platform will be a disruptive force in the net-lease and open-air retail sectors and when this opportunity presented itself, I immediately put my name forward for consideration,” said Sorenson. “With over a billion dollars in potential buying power and backed by three renowned co-investors as well as RPT’s deep operational and financial expertise, our platform is well positioned to serve as a long-term strategic partner to both best-in-class regional essential retailers and larger national operators, as they face a shifting market environment. To be able to do this while unlocking value for our co-investors and RPT shareholders is a true win-win.”