Pine Tree's $100M Pipeline
Pine Tree Commercial Realty kicks off its 20th year in retail real estate with a $100M plate of projects. (When we turned 20, our plate had ramen... about $3 worth.) We stopped by its Northbrook HQ for a chat.
“We’ve done everything you can legally do to a shopping center,” co-founder Peter Borzak (left, above) laughs (get your head out of the gutter). The firm’s pushing 70 centers, acquired or developed, around the country. The latest value-add deals: a 97k SF center in Kansas City, Mo., with a new building going up for La-Z-Boy, and a 214k SF property outside Reno, Nev., anchored by Costco and Home Depot. Development projects: a Mariano’s-anchored center (below) in Evergreen Park (with Inland Real Estate Corp and IBT); a 280k SF regional mall redevelopment in Mount Vernon (with Wanxiang and Sansone Group); an old Kmart reno in Boise, Idaho with Inland; and 20k SF of retail with Lyon Communities in San Marcos, Calif.
Most of those were off-market deals, speaking to Pine Tree’s credibility in a market that has trailed dead bodies since ’07, EVP Todd Zinsmaster (second from left, back row), an avid fisherman, tells us. The team weathered the downturn thanks to strong asset management and transparent communication with partners, says EVP Lee Pearson (orange shirt), an outdoorsman you might see gardening or turkey hunting. The firm recently brought on Graham Grochocinski (front row left) as marketing/creative director (fun fact: he once worked at a radio station in France) to help stores improve customer experience through integration with e-commerce and social media. (Think scanning items in-store and geo-fencing.)
Retail’s challenge this year will be rising interest rates, Todd says, which could impede smaller institutional groups from getting a decent yield on core product. (Hence Pine Tree’s focus on value-add.) But retailers continue to expand, they tell us, especially grocery, restaurants, entertainment, and mid-box discounters. The key is to carefully review their financial stability and execute leases with caution, says EVP Tim Roe, who loves taking his four boys sailing. And it’s the dirt that matters at the end of the day (Mount Vernon groundbreaking, above), as changing technology makes a slam dunk location more important than ever.
Pine Tree plans to sell three assets this year, Peter says, thanks to a slew of lease renewals and a loan coming due. Before we end, we’ll finish introductions: EVP and legal eagle Bruce Boruszak’s (right) just back from a golf trip to Florida; SVP Phil Spitz (third from right) spends his spare time playing tennis and spoiling his grandchild; VP and underwriter Tom Seurynck (back left corner) is about to take his three girls to Disney; and Ryan Montes (second from left), a newbie who started this week in property/asset management, has a European honeymoon planned later this year.