DJM Capital Partners is seeking a partner to invest in a portfolio of four predominantly grocery-anchored retail properties in Southern California.
According to HFF, which has been retained to market the properties, DJM is looking to sell a 50 percent stake in the nearly 1 million square-foot portfolio.
The San Jose, California-based private equity real estate firm, which acquired the portfolio in 2003 and 2004, will retain the remaining 50 percent interest. Both HFF and DJM declined to disclose how much equity they’re seeking for the stake. Data from Real Capital Analytics reveals that the firm originally acquired the properties for approximately $213 million.
The equity raised via the stake sale is expected to be used to recapitalise the portfolio and for future retail investment opportunities. The equity will also be distributed to long-term, existing investors on a pro-rata basis, while principals of DJM should maintain significant equity positions in the portfolio going forward. DJM would maintain day-to-day management responsibilities of the properties.
DJM is looking for an equity investor that shares its focus on investing in retail assets in strong local economies along the West Coast. DJM said it would add value through asset management, marketing, leasing, renovations or development.
The properties in the portfolio, known as the DJM Retail Portfolio, are located in Lakewood and Torrance in Los Angeles County; La Habra in Orange County; and Ventura in Ventura County. As of 30 June, the portfolio has an occupancy level in excess of 96 percent. The tenant roster is dominated by such national retailers as Drug Emporium, OfficeMax and Regal Cinemas. Three of the four portfolio properties have grocery anchors. DJM acquired the properties in 2003 and 2004 and have been managing them since.
Since its formation in 1992, DJM’s typical strategy has been to target undervalued commercial properties throughout California, then managing, re-developing or re-positioning these assets.