Steven Grimes, president and CEO of Retail Properties of America, Inc. (NYSE: RPAI), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Retail Properties of America is one of the largest owners and operators of shopping centers in the country. The firm owns a diversified mix of assets that includes power centers, community centers and lifestyle centers.
In October, the company received its second investment-grade rating. Grimes said the significance of the rating is “huge” as it will allow the company to achieve one of its primary objectives: accessing the unsecured bond market.
Grimes said the company made it clear at the time of its 2012 initial public offering that “we wanted to avail ourselves of all forms of capital, so that we could lower our cost of capital and drive better long-term returns for shareholders and drive value for the company.”
Grimes also noted that the company has made “significant progress” since announcing a broad repositioning of its portfolio in June 2013. Retail Properties expects to be in a net neutral position with regard to acquisitions and dispositions in 2014, according to Grimes.
In 2015, the company anticipates that it will be a net seller of assets. “That would imply that the disposition market is more opportunistic for us right now as we move forward with our long-range strategy of repositioning into 10 to 15 markets,” he said.
Disposition opportunities are expected to be robust in 2015, according to Grimes.
“We do have a pretty good pipeline on the acquisition front, but we’re remaining disciplined and making sure we allocate cost of capital appropriately over the long term,” Grimes noted.
Meanwhile, Grimes said he sees strength in retail fundamentals heading into 2015. He stressed that retailers have successfully embraced the omnichannel approach to retail, which encompasses both online sales and traditional brick-and-mortar stores.