The Long Arm of Sterling RE

It’s a first for Sterling Organization’s newest investment vehicle.
Brian Kosoy, Sterling Organization

Brian Kosoy, Sterling Organization

It’s a first for Sterling Organization’s newest investment vehicle, Sterling United Properties I L.P. The discretionary institutional closed-end fund just recently made its inaugural purchase by snapping Wampanoag Plaza, a 225,900-square-foot grocery-anchored shopping center in East Providence, R.I.

Private equity real estate firm Sterling, which recently became a Registered Investment Advisor, is not disclosing financial details or the identity of the seller, but according to City records, Wampanoag’s most recent owner was USAA Real Estate, which had purchased the asset in a co-investment joint venture for $20 million in 2010. For SUP, which focuses on acquiring and operating stabilized or retail centers anchored by market-leading grocery stores, Wampanoag fits the bill.

Wampanoag first opened its doors in 1970 and has evolved over the decades, first with a redevelopment in 1990 and again in 2009 through an extensive renovation. Today the property at 1925 Pawtucket Ave. is 96 percent occupied. “Wampanoag squarely checks every box we are targeting including its excellent retail real estate fundamentals and solid tenant performance,” Ed Senenman, senior managing director of investments and portfolio management with Sterling, noted in a prepared statement.

Soon, there will be more to come from SUP; the fund is on the hunt for more assets that meet its criteria. “We are primarily focusing on major markets from coast to coast across the United States,” Brian Kosoy, president & CEO of Sterling, told Commercial Property Executive. “The reality is we buy corners and not markets. We like to focus on dense infill locations with barriers to entry where the retail landscape is well defined and has limited potential to shift.”

Presently, Sterling has two active investment vehicles. “Our firm is one of only a few exclusively retail real estate institutional private equity firms in the country,” Kosoy added.

In addition to SUP, the firm is investing through Sterling Value Add Partners II, which held its final close in December 2014 with capital commitments totaling $311 million and leveraged buying power exceeding $1 billion. Acquisitions through SVAP II in recent months include the approximately 595,000-square-foot Stones River Mall in metropolitan Nashville and Market Center, an 82,000-square-foot suburban Atlanta neighborhood shopping center.