Excel Trust, Inc. (EXL), a real estate investment trust (REIT) primarily focusing on retail assets, has recently acquired two shopping centers in California for about $161 million to strengthen its position in the market. The properties purchased included Park West Place – a 739,234 square-foot retail shopping center in Stockton for $92.5 million and Gilroy Crossing – a 473,640-square-foot retail shopping center in Gilroy for $68.5 million.
Built in 2004, Park West Place is the only noteworthy retail shopping and dining destination in Stockton and offers a unique variety of shops and restaurants in a lush landscape setting. The mall is anchored by leading retailers such as Kohl’s Corp. (KSS), Lowe’s Companies Inc. (LOW), and Bed Bath & Beyond, Inc. (BBBY). The property is presently 99% leased with an estimated annual net operating income of $7.2 million.
Gilroy Crossing is also anchored by Kohl’s, Bed Bath & Beyond, and PetSmart, Inc. (PETM). The property is currently 99% leased with an estimated annual net operating income of $5.3 million and an average household income of $81,722 within a three-mile radius.
Since its inception, Excel Trust has grown its portfolio through strategic acquisitions to a gross asset value of approximately $414 million, excluding properties under contract. The company targets high-quality regional community centers and neighborhood grocery-anchored centers, primarily anchored by leading retailers of the country. Excel Trust usually enters into long-term leases with its tenants, which insulate it from short-term market volatility.
We currently have a Zacks #3 Rank for Excel Trust, which translates into a short-term ‘Hold’ recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months.
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