AmCap, a Stamford-based private equity real estate firm, has formed a joint venture with the Virginia Retirement System to invest in grocery-anchored shopping centers.
According to Jason Liu, managing director at AmCap, the new partnership will invest up to $250 million in equity. Although he declined to say how much Virginia was committing to the venture, a similar partnership between AmCap and Utah Retirement Systems in 2005 saw the Beehive State commit 95 percent of the equity.
The venture will focus on grocery-anchored retail properties in wealthy and densely-populated neighborhoods primarily in the Eastern US, Colorado and the Chicago metropolitan area, Liu said. It will consider centers in both primary and secondary markets with all levels of initial leverage and no restrictions on existing loan-to-value ratios. Other markets may be considered on a case-by-case basis, he noted.
The venture has no set investment timetable, but again, historically speaking, AmCap's joint venture with Utah deployed more than $500 million over the course of two years. The new venture is targeting unlevered returns 7 to 8 percent.
AmCap began buying retail centers again last summer after a four-year acquisition hiatus. “We see a lot of opportunities with developers and groups that ran into rough waters during the recession,” said Liu. “The amount of product and quality of product has increased substantially.”
AmCap owns and operates grocery-anchored retail shopping centers in 20 states and has managed a variety of investment vehicles that include joint ventures and separate accounts with institutional investors and major pension plans.