LaSalle, O'Connor buy retail site for $135m

The private equity real estate firms plan to build a retail center in Orlando, Florida, adjacent to an outlet center.

LaSalle Investment Manager and O'Connor Capital Partners have teamed up to build a Florida retail center, the firms said Tuesday.

In the private real estate firms' first joint venture, they acquired the Vineland Pointe development site in Orlando, Florida for $135 million. Construction of the 456,000 square foot regional power center is scheduled to begin in June and finish in the second quarter in 2018. The property, located next to the Orlando Vineland Premium Outlets, is close to Orlando's theme parks.

Vineland Pointe is 60 percent pre-leased. Retail tenants include the Burlington Coat Factory and Ross Stores, while non-retail tenants range from food and restaurant operators – such as a specialty grocer and fast-casual restaurant Shake Shack – to a fitness facility and an upscale bowling alley.

Terms of the transaction were not disclosed, but PERE understands that Chicago-based LaSalle provided 90 percent of the equity for the acquisition, while O'Connor provided 10 percent. New York-based O'Connor is leading the leasing and development of the property.

Capital for LaSalle's portion of the purchase came from LaSalle Property Fund, the Chicago-based firm's core fund. The firm launched the US-focused vehicle in 2009, according to its website. The open-ended fund's gross asset value is about $4 billion, and it has returned over 12 percent over the last five years, sources with knowledge of the vehicle said.

“This investment is consistent with our fund's objective to invest in high quality retail properties with exceptional locations,” Jim Garvey, the portfolio manager for the vehicle, said in Tuesday's statement. “We look forward to adding this unique and attractive build-to-core retail asset to our portfolio.”

O'Connor closed its most recent commingled fund, O'Connor North American Property Partners II, in 2008 on $529 million, according to PERE data. Since then, the firm has invested via separate accounts.

“Vineland Pointe is located in the heart of the largest tourist destination in the world, and at the center of the dominant retail corridor in the region,” said Bill O'Connor, the firm's chief executive. “We already have strong interest from top national retailers, and anticipate that Vineland Pointe will be a prime regional destination. We are excited to begin groundbreaking on the first phase of the project.”