Branch Raises $200M to Acquire Retail

Branch Properties, LLC, an Atlanta-based privately held real estate investment firm, recently raised $200 million of equity through a strategic alliance with a U.S. institutional partner.  To date, the firm has invested $54 million to acquire $166 million of assets totatling over one million square feet of grocery-anchored retail space in Florida, Georgia, North Carolina and South Carolina. With the additional funding, Branch is seeking to acquire approximately $350 million of value-add, necessity-based neighborhood centers throughout the Southeast over the next three to five years.

“The retail market excites us,” explains Nick Telesca, president of Branch Properties, LLC. “Retail has always been a core strength of ours. Since 1973 we have acquired and/or developed over 110 grocery-anchored shopping centers throughout the southeastern United States. As the economy continues to recover, we are now completely devoted to exploiting the return of retail. It’s what we’ve done best for the past four decades.”

In less than nine months, Branch acquired over one million square feet of retail property, including two Kroger-anchored centers in metro Atlanta: Shallowford Falls, a 103,500-square foot neighborhood center; tenants include Kroger, Ace Hardware, Los Cazadores, Crown Fabric Care and Biscuits and More; currently 92% leased; located at the intersection of  Johnson Ferry and Shallowford Roads in East Cobb and Kroger Powers Ferry, a 45,500-square foot, triple-net lease transaction; located at the intersection of Powers Ferry and Delk Roads in Marietta.

In addition, the company acquired Coastal North in North Myrtle Beach, SC (300,000 sf; Publix-anchored); Battleground Village in Greensboro, NC (73,000 sf; Earthfare-anchored); and four grocery-anchored centers in Florida totaling over 450,000 sf in Sanford (Albertsons-anchored; Orlando MSA), Palm Coast (Publix-anchored), Cocoa Beach (Publix-anchored) and Bradenton (Publix-anchored; Tampa MSA).

With several deals still in the pipeline for 2014, Branch expects to acquire another $100 million of retail assets bringing its acquisitions to $266 million totaling 1.65 million square feet by year-end, and another $150 million in 2015. The company’s portfolio currently includes 46 properties valued at $805 million. Branch officials expect necessity-based retail centers to remain strong as a well-positioned, asset class in the recovering economy.

“Branch has done more business in the past 24 months than we have done since 2004 when we sold a $400 million portfolio,” explains Telesca. “This speaks to the size of the opportunity. With job growth continuing and consumer balance sheets improving, people are shopping again across all categories. Over the next three to five years, we see a fantastic opportunity to put together a $1 billion portfolio of high quality retail assets.”