Irvine-based shopping center owner and operator Pacific Castle Real Estate LP is looking to up its push into ethnic markets, striking two buys worth $52 million and starting a partnership with one of the country’s largest real estate investors.
Pacific Castle formed a venture with Prudential Real Estate Investors, part of New Jersey’s Prudential Financial Inc.
The two plan about $500 million in deals, according to Rod Astarabadi, Pacific Castle president.
The plan is to invest in shopping centers that target Asian, Hispanic and other ethnic shoppers, primarily in the Western U.S. Pacific Castle says it has done well in tapping such markets.
The venture’s expected to last through 2014 and could result in more than the $500 million initially announced, Astarabadi said.
“This is a platform relationship, not just a one-off deal,” he said. “It will allow us to buy single properties, a portfolio, or even a real estate company with its own portfolio.”
The partnership should more than double the holdings of Pacific Castle, which was started in 1993. It currently owns 10 shopping centers, including several in Orange County.
The Prudential venture will allow Pacific Castle to close deals in as little as 10 days, Astarabadi said.
The deal with the investment manager comes as Pacific Castle closed on two separate buys, not part of the partnership.
Pacific Castle spent $27 million to buy Rancho Cordova Town Center in Rancho Cordova, just outside Sacramento. Irvine-based Passco Cos. sold the 270,000-square-foot shopping center.
It also spent $25 million for Bay Plaza, a 123,000-square-foot shopping center in National City, a suburb of San Diego. A Safeco Corp. unit sold the center in the area’s Filipino Village.
The company’s focus on ethnic shopping centers stems from Pacific Castle founder Wayne Cheng. He’s of Taiwanese descent and has worked to bring in Chinese-American investors.
Pacific Castle currently counts about $300 million in assets. About half of its holdings are local, including Trabuco Hills Center, Portola Plaza, Avery Center and Crown Valley Retail Center in Mission Viejo, as well as a Costco-anchored center in San Juan Capistrano.
The Trabuco Hills deal is one of the company’s better investments. It bought the property for $15.2 million in 2002, when the center was less than 50% full. It now is about 90% filled, and worth more than $30 million, according to the company.
Whether the venture looks to OC for more buys remains to be seen. Demand from other institutional buyers has made the county an expensive market to buy in, Astarabadi said.
More deals could be seen in San Diego, the Inland Empire and Northern California, according to Astarabadi.
