O'Connor Capital, Wafra Purchase Two Retail Centers Totaling 332 KSF

O'Connor Capital Partners and Wafra Investment Advisory Group have joined forces, acquiring The Promenade at Chenal in Little Rock, Ark., and Phase II of Settlers Ridge in metropolitan Pittsburgh, Pa.

By Barbra Murray, Contributing Editor

The Promenade at Chenal

O’Connor Capital Partners and Wafra Investment Advisory Group join forces once again, acquiring The Promenade at Chenal in Little Rock, Ark., and Phase II of Settlers Ridge in metropolitan Pittsburgh, Pa. The partners purchased the two properties, which total approximately 331,700 square feet, through O’Connor/Wafra Retail Partners, a fund that is expected to raise $300 million.

Investors are picking up their pace of activity in the retail sector and with the mounting competition comes the increasing challenge of snapping up premier assets, even in non-core destinations. “High-performing retail properties located in any market are difficult to acquire and are rarely available for sale,” Joel Bayer, president and COO with O’Connor Capital, told Commercial Property Executive.

O’Connor/Wafra purchased a 90 percent stake in the 276,100-square-foot Promenade, leaving the property’s developer, Red Development, with the remaining 10 percent interest. “This was an off-market transaction that was initiated due to a decade-long relationship between O’Connor Capital Partners and RED Development,” Bayer noted. The upscale, four-year-old lifestyle center sits in what is considered Little Rock’s most exclusive neighborhood. Designed in the style of a Main Street shopping district, the Promenade is 81 percent occupied and home to the likes of Apple, Nike Factory Store and J Crew. The prominent property has become the location where many leading retailers, including the aforementioned group, have chosen to make their debut in Arkansas.

In a separate transaction on behalf of O’Connor/Real Vest Retail Holding Company L.L.C., O’Connor/Wafra purchased Phase II of the CBL Properties-developed Settlers Ridge, a 94,600-square-foot open-air center in Robinson Township. The property is 100 percent leased to a group of tenants that includes Ross and Michael’s. The acquisition comes just under one year after O’Connor/Wafra teamed with The Wilder Cos. to purchase Phase I, a 400,000-square-foot regional shopping center that opened in 2009.

O’Connor/Wafra remains on the prowl for opportunities and is not waiting for “for sale” signs to be posted. “O’Connor has long standing relationships with property owners, retailers and lenders and is currently involved with other off-market transactions,” Bayer said.

The fund’s purchases dovetail with an anticipated trend for 2012. As Marcus & Millichap Real Estate Investment Services Inc. noted in a forecast for the year, “The limited number of premier properties in the ‘right’ markets will hit record-high price levels, moving investors into secondary markets as risk tolerance expands and capital conditions become increasingly more fluid.”