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South African REIT Teams with Rainier Cos. to Buy Indianapolis Shopping Center

Purchase Would Be Fourth for Newly Formed Joint Venture with Continuum Investments
March 7, 2018
Stony Creek Marketplace

The Rainier Cos. has begun pitching a new investment offering set up to acquire Stony Creek Marketplace, a 204,811-square-foot regional power center in Noblesville, IN near Indianapolis.

The fund, Rainier Stony Creek Investors, includes Emira Property Fund, a publicly traded REIT in Johannesburg, South Africa, as an investor.

The offering is available exclusively through online marketplace CrowdStreet.

Stony Creek Marketplace, currently owned by Retail Properties of America (NYSE: RPAI), is shadow-anchored by a 165,000-square-foot Meijer grocery store. Other tenants include Best Buy, TJ Maxx, HomeGoods, Barnes & Noble, PetSmart, Party City, Shoe Carnival, Pier 1 Imports, Logan's Roadhouse, and Panera Bread, all of which have been at the property since its original development in 2003.

Rainier expects a five-year holding period with an 11% current cash yield to investors and a 15% internal rate of return.

This would be the fourth joint venture retail investment by Rainier and CIL2 LLC, managed by Continuum Investments Ltd., whose principal investor is Emira Property Fund. The pair of investors are planning more acquisitions.

"We have a bit of a contrarian view of retail real estate at the moment compared to the investing public," said Rainier principal, Danny Lovell. "We are a value investor, and our research indicates that there is value in the pricing dislocation of retail real estate today. Granted, there are some retailers that won't make it and others that will struggle, but we do not see Armageddon in the retail real estate market and believe with a high-quality operator, good capital structure and attractive debt, retail is a great place to be investing."

Emira Property launched its U.S. real estate investment strategy last October.

Emira and Rainier are partnering on a 49% to 51% equity basis, respectively, at the individual property level

Previous investments by the joint venture include Belden Park Crossings shopping center in North Canton, OH, for which it paid $21.1 million; and 32 East Shopping Center a 189,000-square-foot Class A retail power center in Cincinnati for which it paid $29.1 million.

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