Brixmor l At The Center with Jim Taylor in San Clemente, CA

🎥 Jul 05, 2023 📺 Brixmor Property Group ⏱ 2m 👁 205 views

Brixmor CEO Jim Taylor travels to San Clemente, California in South Orange County to show the value created through clustering ...

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About James Taylor

James Taylor, CEO of Brixmor Property Group, has described the open-air retail sector as benefiting from strong fundamentals, citing "no new supply" combined with "robust demand" from retailers who have recognized the role of physical stores in serving customers. He has characterized tenant disruption as an opportunity to "bring in better tenants at better rent," noting that struggling tenants do little for a shopping center and can be replaced with tenants that drive more traffic and higher rents. Taylor stated that Brixmor has been increasingly active on the acquisition and disposition front, with about $200 to $300 million under control and expectations for that figure to grow. Taylor has highlighted Brixmor's strategy of clustering investments in specific markets and reinvesting capital into existing properties. He cited examples such as the Shops at Palm Lakes in North Miami, where the company converted an older grocery store to a more relevant concept, replaced a dark Kmart with LA Fitness and dd's Discounts, and added outparcels, generating an incremental 8% return on $31 million invested. In Venice, Florida, he noted a $9 million investment at an incremental 11% return, creating over $8 million in additional value. Taylor has also emphasized the company's purpose of creating centers that serve as the heart of their communitiesholistic.

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Transcript (5 segments)

James Taylor0:05

Hi, I'm Jim Taylor at the Center Ocean View Plaza here in San Clemente, California, an affluent community where we not only own this shopping center, we also acquired the shopping center next door, Plaza by the Sea. A great example of our clustering strategy whereby we drive value not only in rate but also occupancy, as well as finding opportunities to further densify and reinvest in these properties, truly driving them to be the center of this great community.

Ocean View Plaza is a 170,000 square foot dual grocery anchored center with a Rouse and Trader Joe's as well as a CVS Pharmacy. It's located immediately adjacent to our Plaza by the Sea property. Plaza by the Sea is anchored by a Stater Brothers grocer, and together with Ocean View Plaza totals nearly 220,000 square feet of open-air retail space in San Clemente, California and South Orange County, which has an average household income of about $160,000 per year.

We acquired Plaza by the Sea at the end of 2017 for just over $13 million. This property had been on our target acquisition list for a long time. We approached the owner, a private individual who had owned the center for 25 years, and were able to successfully buy this asset off market. We have since commenced a number of value-enhancing projects including a complete facade renovation, a new parking lot, new roofs, and new landscaping, completely transforming the center.

One of the exciting things at Plaza by the Sea is an out parcel development project where we tore down an old restaurant building and are creating a 2,100 square foot out parcel with a drive-thru. We landed Handles as one of our tenants, which is a very popular ice cream chain, and Better Buzz Coffee, a specialty coffee chain with locations throughout California. The project cost is about $3 million at a 7% yield, adding about $500,000 of additional value to the project.

As a result of these improvements at Plaza by the Sea, we have grown total occupancy by 640 basis points and increased our ABR per square foot by 92%. And at Ocean View Plaza, since acquiring Plaza by the Sea, we've been able to grow occupancy 260 basis points and ABR per square foot by 16% to over $33 a square foot today. Thank you.