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New retail REIT ShopOne looking to cash in on market dislocation

ShopOne Centers REIT Inc. announced the formation and launch of its new platform, a private real estate investment trust (REIT) focused on acquiring, operating and managing grocery-anchored shopping centers.

ShopOne is led by retail real estate veteran Michael Carroll, chief executive officer, who will be assembling an executive team.

Michael Carroll

The company comes to market with a high-quality, geographically diverse portfolio. ShopOne and its affiliates own and/or manage 46 shopping centers in eight states with more than 4.65 million square feet of gross leasable area, the majority of which were acquired from Devonshire REIT, Inc.

The majority of equity of ShopOne is owned by funds affiliated with Davidson Kempner Capital Management LP.

ShopOne aims to purchase well-located shopping centers in densely populated, fundamentally strong markets across the country.

The company is looking to take advantage of dislocation in the retail marketplace to acquire assets at attractive valuations to replacement cost and enhance net asset value through operational and capital improvements.

“We believe strongly in the long-term fundamentals supporting continued investment in shopping centers anchored by top-performing grocers, leading discounters and off-price apparel retailers,” said Carroll.

“We intend to be very active in the market as we seek to grow our portfolio and gain scale in high-density, in-fill metro areas. With a proven operating platform, deep institutional knowledge of the dynamic retail landscape and an extensive professional network, we are well-positioned to carry out our business objectives.”

Despite the challenges facing the broader retail industry, necessity-based retailers such as grocery stores, restaurants and fitness centers continue to perform well.

New development continues to be at historically low levels and the retail sector continues to experience high occupancy, creating demand and opportunity for well-located retail centers to accommodate new tenants through repositioning and redevelopment.

ShopOne intends to capitalize on this favorable supply/demand dynamic through strategic acquisitions and by pursuing value-enhancing redevelopment and leasing initiatives.

In line with its growth strategy, ShopOne recently acquired Conyers Commons, a 118,420 s/f shopping center located in Conyers, Georgia.

Carroll is a 25-year veteran of retail real estate previously serviced as CEO of Brixmor Property Group and holding several prominent positions at New Plan Excel Realty Trust, Inc..

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