The new commercial real estate firm set to handle Liberty Center’s leasing, property management and marketing starting next month is “a very good fit,” according to a representative for the center’s owner.
Apollo Commercial Real Estate Finance Inc. owns the 1.2 million-square-foot mixed-use development, and last week it switched companies that lease, manage and market it, going from Chicago-based JLL to Birmingham, Alabama-based Bayer Properties
Founded in 1983, Bayer owns or operates more than 10 million square feet of retail and office space across the United States. The firm, which takes over for JLL on Dec. 1, is “highly qualified” and Liberty Center fits squarely within its portfolio of mixed use development, according to Apollo consultant John Turner.
“This is not the only project that I’ve worked on with Bayer, so we know exactly what we’re getting,” Turner said. “If you look at what Bayer owns, leases and manages in terms of asset type, we think it is a very, very good fit.”
Liberty Center is Bayer’s first property assignment in Ohio. With the addition of Liberty Center, the firm has expanded its portfolio by more than 2 million square feet this year.
Ten members of the Bayer Properties team visited Liberty Center for two days this week to get a better understanding of the site, Turner said.
The Dec. 1 switch from JLL to Bayer will arrive 15 months after Liberty Center co-developer Steiner + Associates was removed from retail leasing and property management and JLL was brought int.
Bayer has “several meaningful conference dates coming up where Liberty Center will be front and center,” including International Council of Shopping Centers’ New York Deal Making conference, he said.
Liberty Center’s occupancy remains in the low 80 percent range, said Stuart Rothstein, Apollo Commercial Real Estate Finance’s director, president and CEO, in an Oct. 24 third quarter earnings call.
That, he said, reflects the balance between new tenants, which are predominantly food, entertainment or experience related, with continued challenges in retaining traditional soft goods retailers whose business models are changing rapidly.
Rothstein said that the management team at JLL “has done a commendable job managing and optimizing costs” as well as strengthening the center’s presence in and relationship with the surrounding community.
“We continue to view this center as being well located in a market that continues to see both business and residential growth,” he said. “The next step in protecting and recovering value is to re-envision the future of this center in the face of an ever-changing retail real estate landscape.”
Rothstein said Apollo was finalizing terms to enhance leasing by bringing in a team with “more of an owner’s mentality and a demonstrated track record of creativity and responding to the new paradigm of retail real estate.”
During the Oct. 24 call with investors, Jade Rahmani, a senior research analyst with investment banking company Keefe, Bruyette & Woods Inc., asked Apollo executives “why not just foreclose on the property, sell the asset and move on in terms of the amount of management resources, et cetera, that has to be put to work in this asset?
Rothstein answered that Apollo officials believe there is still value to be achieved or recaptured through their efforts being spent on the asset.
“We think there’s still work to be done in order to maximize what we think the return could be for the investment,” he said.
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