About Stuart Tanz
Stuart Tanz, president and CEO of Retail Opportunity Investments Corp. (ROIC), has stated that the company's grocery- and drug-anchored shopping centers have been insulated from the worst impacts of COVID-19, e-commerce, and inflation. In a 2022 interview, he described the first quarter of the year as "very strong" across the strip center sector, driven by tenant demand and a lack of new supply since the credit crisis. Tanz noted that inflation benefits the business because many leases are tied to CPI escalators, but added that retailers' margins are being squeezed despite sales increases. He also said that labor and supply chain issues continue to impact the industry, with labor shortages limiting store counts and supply chain delays requiring retailers to pre-order fixtures with lead times of up to 18 months.
Tanz has emphasized the company's focus on acquiring older assets from private sellers, where the NOI profile offers good mark-to-market rents and growth potential over three to five years. He has stated that the company's deep relationships on the West Coast, where it has operated for close to three decades, give it a distinct advantage in sourcing off-market transactions. Tanz has also highlighted the company's unencumbered balance sheet as a key tool for building value, and noted that ROIC was one of the first public companies to tie ESG benchmarks to compensation. He has described the West Coast markets as varying in their cycle position, with Seattle and the Bay Area in "later innings" while Portland and Southern California remain in "earlier innings."
Source: AI-verified profile updated from Stuart Tanz's recent appearances.
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Transcript (11 segments)
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Interviewer0:09
Joining me for this CEO spotlight is Stuart Tanz, the CEO of Retail Opportunity Investments Corp. Stuart, thanks so much for joining us.
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Stuart Tanz0:16
Thanks for having me.
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Interviewer0:18
Let's start by talking a little bit about your portfolio acquisitions so far in 2016 and how the relationships that you've built over the last several years in your core markets helped you land some of these deals.
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Stuart Tanz0:27
To date, we've acquired about just over $300 million of grocery-drug anchored shopping centers. The relationships are a big part of our external growth strategy. We have been operating on the West Coast for close to three decades, and that has given us a distinct advantage in terms of sourcing transactions and opportunities for the company through sellers, through brokers, and other people who we do business with. So again, we're having a very strong year this year, and we're very excited about what we've purchased, and more importantly, the quality of the assets have been tremendous. With that, they also have the attributes of very strong internal growth as we work our magic in terms of either remerchandising or waiting for these leases to expire and picking up on that.
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Interviewer1:23
What sort of trends are you seeing among your tenants that are expanding, looking for larger space, and how does that factor into as leases come up and you look at signing new deals?
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Stuart Tanz1:34
Well, the trends out West on the West Coast have been very strong. Starting out in the Pacific Northwest, which is the Seattle and Portland market, what we're seeing today is that the most active tenants are continuing to be the grocers. Moving down the coast to Northern California, health clubs, beauty stores, medical, urgent care, and other types of medical uses have been very strong. And in Southern California, it's really been restaurants, a lot of new concepts, and we've seen a lot of activity on that front. Not only that, the fundamentals have been very, very strong out West, and what we've been able to do is really play offense in terms of looking at our real estate and our shopping centers, and really because the demand has been so strong, we've been able to continue to capitalize on this strength in terms of remerchandising our space. Obviously, what that's led to is that the company has posted some of the strongest metrics in the sector, and that's primarily again because of how strong our tenant base has been.
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Interviewer2:42
And you mentioned fundamentals and that they look strong across your portfolio. Are there any markets where you're starting to maybe see some cracks or starting to have some concerns?
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Stuart Tanz2:50
Well, the West Coast of the US was the last section of the country that came out of the great credit crisis or the recession, and they're usually last in and last out. So when you look at the West Coast today, Seattle and San Francisco or the Bay Area are probably in what I would call the later innings in terms of the fundamentals. However, Portland and Southern California really came out last and those fundamentals are still in what I would call the earlier innings. So as we look across the West Coast, the markets do vary in terms of the strength and where we see things going in '17. But more importantly, what we continue to see is that these markets have held up and continue to be very, very strong, and I really don't see much of that changing as we look into '17.
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Interviewer3:44
Stuart, thank you so much for joining us.
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Stuart Tanz3:45
Thank you for having me, and as always, it's wonderful being here with you.
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Narrator3:49
For more from REIT World 2016, be sure to visit REIT.com.
