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Monday, 11 February 2019

Venture Pursues Grocery-Anchored, Service-Oriented Shopping Centers in Smaller Markets

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Commercial Real Estate Direct Staff Report

Carnegie-Weinberg, a venture of family office Weinberg Capital Group and real estate investor Carnegie Cos., is pursuing small- to mid-sized grocery-anchored and service-oriented shopping centers in secondary and tertiary markets.

Weinberg Capital, of Cleveland, primarily invests in middle-market companies in various industries, but it is looking to expand its focus on real estate investments. Carnegie, meanwhile, is Solon, Ohio, owner of retail and industrial properties and undeveloped land in 13 states.

The venture is pursuing shopping centers with 50,000 to 150,000 square feet primarily in the Midwest United States, but it also is open to investing in other parts of the country. It is looking at areas without much retail competition and with favorable economic and job growth prospects. The venture may target other real estate sectors, such as multifamily, office and industrial, in the future, but it has found grocery-anchored properties provide the best opportunities now.

"We feel there is tremendous value as the retail landscape is going through its changes," said Weinberg Capital principal John Herman, who manages the firm's real estate investments. "We are taking the position that many basic needs and services will continue to be in demand."

Carnegie-Weinberg is targeting shopping centers that are anchored by grocery stores and have service-oriented tenants such as medical centers, dry cleaners, barber shops, salons and day-care centers. Those businesses are not as prone to e-commerce competition as typical brick-and-mortar retailers.

"We see a significant opportunity in this subsector of retail real estate," Herman said. "We're looking to scale the portfolio together."

Weinberg Capital and Carnegie provide most of the equity for the Carnegie-Weinberg deals, but they also raise additional capital from other family offices. The venture obtains financing for 65 to 75 percent of a property's value.

Last month, the venture bought the 139,757-square-foot Sangamon Center North shopping center in Springfield, Ill. That property, at 1861-1945 East Sangamon Ave., is anchored by a 63,257-sf Schnucks grocery store. Other tenants include the United States Postal Service, CVS, Pet Supplies Plus, Hair Cuttery and Subway.

That was the second deal completed by Carnegie-Weinberg. Three years ago, it bought a portfolio of three shopping centers with 174,000 sf in Greenville, Mich. The properties in the portfolio are The Marketplace, at 701-703 South Greenville West Drive; Greenville West, at 300 South Greenville West Drive; and Hathaway Circle, at 1925 West Washington St.

The venture has another deal under contract and expects to acquire more properties as well.

Weinberg Capital was formed in 2010 as the family office for Ronald E. Weinberg, who sold Hawk Corp. that year to Carlisle Companies Inc. of Charlotte, N.C., in a deal valued at $413 million. Weinberg was the co-founder and chief executive of Hawk, which manufactures brake materials used in the aerospace, industrial and specialty consumer industries.

Weinberg Capital typically invests in companies with annual revenues from $15 million to $100 million and earnings before interest, taxes, depreciation and amortization, or EBITDA, of $2 million to $10 million. It pursues firms operating in numerous industries, including manufacturing, business services, medical and healthcare, aviation services, consumer products and distribution.

Weinberg Capital has made a few small investments in real estate deals, but it did not act as a principal until joining forces with Carnegie, which was formed in 1991. Carnegie is led by principals Paul D. Pesses and Peter C. Meisel, who had known Weinberg Capital's executives for several years before forming the venture.

Comments? E-mail Tim Casey or call him at (267) 397-3347.


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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Retail
  • Subject: Institutional Investment (INS), Property Acquisitions (ACQ)
  • Private: No
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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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