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LA-based Westwood Financial is  moving forward  on two more shopping center buys in areas of Atlanta that its head of acquisitions feels have reached ?maturity? in a vary transient market. (No curfews for these markets.)
westwood financial joe dykstra westin buckhead retail atlanta kennesaw alpharetta
We met Westwood's Joe Dykstra  for espresso yesterday morning at the Westin Buckhead as he laid out his company's strategy for  retail acquisitions in Atlanta and nationwide. The company currently has two shopping centers under contract in Kennesaw and Alpharetta but declined to identify them until the transaction is complete. (And no hints either.) Yet, Joe says Westwood is getting a little concerned again about shopping center pricing as capital floods back into retail real estate. ?There's a lot of property in the market where buyers and sellers have  big expectations,? he says. Joe says cap rates have compressed again to an average of ?seven-ish? since the recovery began. Prior to the crash, caps sank to the six range, but jumped to eight in the depth of the recession, he observes. With more than $1B in assets, Westwood seeks core retail assets, mainly grocery-anchored, between  $10M to $20M, Joe says.
publix-anchored westwood financial kennesaw 2003 purchase abbotts bridge orchard square
Westwood entered Atlanta with the purchase of this Publix-anchored shopping center in 2003. The private-equity CRE investment firm now owns  five centers in Atlanta, including Abbotts Bridge Station in Johns Creek and Orchard Square in Kennesaw, markets that Joe says are ?mature? with  established neighborhoods and good daytime traffic. Joe says he generally only buys centers that are ?necessary? to shoppers (hence grocery-anchored) and at least five years old, giving the rents time to better reflect current dynamics. ?Frankly, older is better,? he says. ?If your property is two, three years old, how do you really know how it will perform?? Of all the metrics Westwood evaluates, Joe says the company feels current rents are the most important. ?If the tenants are  making money … that's all anybody cares about. And that's really the metric that more folks need to focus on.?