Vestar forming fund to purchase retail real-estate projects

Vestar Development Co. announced the formation of a $250 million opportunity fund to bankroll the shopping-center developer's acquisition of retail real-estate projects throughout the West that now are selling for bargain prices.

Vestar partner David Larcher said the $250 million could be leveraged into $700 million to $800 million in real-estate acquisitions.

He said Vestar Strategic Retail Partners will target retail properties in the $20 million to $100 million range that can be enhanced by the company's experience and management.

Over the past two years, Phoenix-based Vestar has partnered with institutional investor Rockwood Capital of New York City to acquire shopping centers valued at more than $400 million. Last month, the group paid $79 million in cash for a landmark Las Vegas-area retail development. It was Vestar's first acquisition in the Las Vegas area.

Larcher is optimistic the company can raise the prescribed $250 million by mid-2012 and is working with Dallas-based Stephen Inc. to market the fund to investors. Once funded, Vestar Strategic Retail Partners will become the company's exclusive vehicle for financing acquisitions.

Vestar currently manages more than 21 million square feet of retail property with an average occupancy of 97 percent.

"We believe this is a great time to invest in value-add retail properties," said Bob Cavanaugh, Vestar's chief investment officer. "With our firm's track record of acquiring and stabilizing struggling assets, we are confident that our in-house capabilities will create meaningful value for the fund's investors."

by Max Jarman The Arizona Republic Dec. 1, 2011 06:22 PM



Vestar forming fund to purchase retail real-estate projects