Devonshire REIT expands retail holdings

Investment trust acquires 5 properties

The Monroe Street Market Square shopping plaza, which is anchored by Hobby Lobby, has been sold to Devonshire REIT.

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The Monroe Street Market Square shopping plaza, which is anchored by Hobby Lobby, has been sold to Devonshire REIT.

Devonshire REIT, a locally based real estate investment trust that bought a key retail property on Monroe Street in September, has spent an additional $31 million on four more properties on Monroe Street and one near Waterville.

Devonshire, which is located in Whitehouse and which converted to an investment trust in 2013 after operating since 2009 as a private equity group, added a total of 315,497 square feet to its portfolio with its five-property acquisition, most of which closed last week.

The company now controls more than 555,000 square feet of retail space in a three-quarter-mile portion of Monroe Street between Talmadge Road and Whiteford Road.

In September, it bought the Shops at Franklin Place on Monroe Street, which is is anchored by a Target store.

Todd Latham, executive vice president and chief marketing officer for Devonshire REIT, said the Monroe Street properties were good investments financially and strategically.

“The numbers were good and we think it gives us a little more control on that portion of Monroe Street,” Mr. Latham said. “Owning these properties gives us options in the future if someone is looking for vacant space on Monroe.”

All four of the new purchases on Monroe Street are 100 percent leased.

“At this time, there’s no plans to redevelop any of those [new] spaces,” Mr. Latham said. However, the trust likely will spruce up its new properties at some point, he added.

Only the Shops at Franklin Place, which was purchased in September and where the REIT plans to build new space and subdivide existing space, has any openings.

And nearly all of those potential openings already have tenants-in-waiting.

“Practically everything is spoken for. We plan to redevelop an end of a building, divide two spaces into three, but part of that is spoken for actually,” Mr. Latham said.

“At the end of the day, when we’re done with Franklin Place, we’ll only have two small spaces that won’t be spoken for,” he said.

However, Devonshire REIT, which owned nine shopping plazas in the Toledo area before its December purchases, is still looking for local properties to add to its $130 million property portfolio.

“I don’t know that we have anything on the radar at the moment. But that doesn’t mean we’re done with possibilities,” Mr. Latham said.

Pete Shawaker, a commercial Realtor with the Reichle Klein Group of Toledo, said it is good to see Devonshire buying more area properties because it means that local owners, instead of out-of-towners, could eventually become the area’s dominant retail property operator.

“First, it’s a great testament to their confidence in Toledo commercial real estate,” Mr. Shawaker said. “But I also think that’s a good thing for them to control that much property because it gives them leverage in dealing with tenants.”

Although Devonshire is only 5 years old, many of its key people were with either the former Bostleman Corp. or the former Timberstone Group, Mr. Shawaker said.

“Their people have gone to [International Council of Shopping Centers] national and regional conventions for the last 20 years,” he said. The more properties Devonshire acquires, the easier it will be for the trust to sell the Toledo area to national and regional retail chains, Mr. Shawaker said.

“Originally, they bought a lot of Timberstone properties. But I think what they’re doing now is a new stage that we’re seeing,” he said. “They are saying: How do we become the dominant property owner in town?”

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.