There has never been a better time to execute an acquisition strategy for Retail Real Estate than this very moment. From the real estate downturn in the early 1990's to the screeching halt of the investment activity from 2008 through 2010, it has been a fast paced ride for investors, owners, and developers. During this period the industry was well capitalized to increase the real estate inventory in order to feed a consumer driven economy. Vast amounts of easily accessible and inexpensive capital produced unprecedented investor demand for real estate, which reduced capitalization rates and caused a tremendous increase in valuations. That Party is over.
During this period, the principals of GROBMAR Investments, LLC executed business plans that included development of strip centers, single tenant assets and redevelopment of larger strip centers and also the timely sale of these assets at and during the real estate frency at the peak of the market. These transactions provide a solid base for which to build upon. GROBMAR Investments, LLC turned down many acquisition opportunities because we believed that the properties were overvalued. GROBMAR Investments, LLC was not willing to pay those prices.
The pendulum has swung in the opposite direction. There is currently a limited availability of debt and equity targeting new real estate transactions, and investors who purchased large amounts of real estate in recent years are spending time managing distressed portfolios instead of acquiring new properties. As a result there are very few buyers of real estate in today's market. Individual properties and portfolios of leased real estate will be offered at returns not seen in over a decade. This is what we have been waiting for.
