In the quest for new retail properties, Paragon Real Estate Funds in Atlanta started small. But by no means is it finished.

This past December, San Diego-based Paragon made its entry into the Atlanta retail fray in a low-key way, with the acquisition of the retail portion of Wood Partners' Alta Glenridge Springs mixed-use project in Sandy Springs. The 20k SF ground-floor retail venue (topped by Wood's apartments), which includes Sushi Mani and Blue Moon Pizza, sold for $6.4M, or $320/SF. Now Paragon's Roberto Jinich says the $160M levered fund is shopping for more like it in Atlanta.

Roberto tells us Paragon is targeting smaller urban retail and mixed-use properties typically overlooked by the big institutional investors and too expensive for mom-and-pop investors. And it's not just Atlanta its shopping: Other markets include Phoenix, San Francisco, Houston and its home turf of San Diego. All these markets have common denominators, Roberto says: Population and tech job growth in the backdrop of having a critical mass of either Fortune 500 or tech companies. “We tried to capitalize on the retail portion of the Downtown corridor,” he says. “We don't have that much competition from [big investors].”

Believe it or not, this is actually a strategy change for Paragon since its 1998 inception. Back then, it was more hungry for multifamily. Today, Roberto says the fund is culling its apartment holdings, and is in fact under contract to sell it's last multifamily holding—a Tuscon apartment complex. “I think prices are being paid that are very high for multifamily because there is inexpensive financing available,” he says. Roberto says Paragon is still very conservative on its buys—never securing a property at more than 50% LTV. While Alta Glenridge is not true CBD retail, Roberto sees Central Perimeter as a new urban corridor that is attractive to Millennials who want that live/work/play atmosphere.