Los Angeles-based Decron Properties has sold Flamingo Maryland Shopping Center, a Target-anchored retail center near the Las Vegas Strip in Las Vegas, NV, for $17.5 million.
The disposition is part of Decron’s strategy to reduce the size of its commercial portfolio in favor of multifamily assets, which are generating higher rental income growth. In the past 24 months, Decron has sold six office and retail assets for more than $300 million, using the disposition proceeds, along with newly raised capital, to acquire seven multifamily communities, totaling 1,630 units, for approximately $500 million.
The rapid growth in the multifamily apartment sector is a reflection of Decron’s plans to increase its apartment portfolio in California, a market that continues to lead the country in job creation. According to a recent Pew Study (http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/5/13/which-states-have-the-most-job-growth-since-the-recession), California has seen close to 2,000,000 new jobs since the Great Recession, 20% more or 300,000 more jobs than the next runner up state, Texas. Decron’s geographic footprint now extends from San Jose to San Diego.
“The last two years have been the most active in Decron’s 60-year history from a transactional standpoint,” said Decron CEO David Nagel. “Completing almost $800 million in capital transactions has right sized our portfolio. Previously 40% of our assets were in the office or retail sector. With technology and e-commerce disrupting how we ‘work and shop’ we committed to our investors that we would reduce our commercial exposure and emphasize more investments into the multifamily sector. During the Great Recession we saw tremendous volatility in our commercial portfolio but very little in our residential portfolio. Successfully executing this strategy puts us in a more stable position to continue to grow for the next 60 years.”
Decron Properties Corp. has a real estate portfolio of 6,700 apartment units and 1.7 million square feet of commercial office and retail space.
