Lincoln, Paragon Form Retail Investment JV

Runway Playa Vista. Image courtesy of Robert Meyers Studio

Lincoln Property Co. has formed a joint venture with El Segundo, Calif.-based Paragon Commercial Group to focus on institutional quality assets and accelerate its West Coast retail investment management strategy. Under the agreement, Paragon will also serve as Lincoln’s West Coast retail operator.

Paragon Co-Founder Jim Dillavou, who has also taken on the role of Lincoln’s National Head of Retail Real Estate Investments & Retail Capital Markets, told Commercial Property Executive necessity retail, including grocery-anchored centers, will be the growth driver on the investment side.

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“As retailers continue to evolve and expand their product offering and merchandising to focus on daily trip generation, we also intend to focus on those assets and retailers,” Dillavou said.

According to Dillavou, the partnership’s retail investments would include acquisition, redevelopment and ground-up development of open-air neighborhood and community centers. He noted the operating platform will include retail brokerage, property management, asset management and fee development for both owners and retailers.

As part of his new position, Dillavou will be responsible for unifying Lincoln’s national retail platform including capital markets, acquisitions, development, occupier and investor leasing, and third-party management. He will partner closely with Lincoln’s investment management team, led by CIO Maria Stamolis, who assumed the role in June after most recently serving as partner & co-head of real estate at Canyon Partners.

Dillavou co-founded Paragon in 2009 with Mark Harrigian and Erwin Bucy. The company invests in value-add acquisition and tenant-driven retail development and opportunities. Harrigian and Bucy will continue to spearhead Paragon’s West Coast expansion under the new joint venture with Lincoln.

Retail investment growing

Lincoln Co-CEOs Clay Duvall and David Binswanger said in a statement the joint venture underscores their belief in the growth of the retail sector. They stated the sector has become increasingly popular with institutional investors at levels they have not seen in more than a decade.

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The companies have worked together on the West Coast in the past, most notably on Runway Playa Vista, a mixed-use project within the Playa Vista, Calif., master-planned community, with shops including a Whole Foods Market; dining; entertainment and apartments. The companies no longer own or manage the asset.

In recent months, other commercial real estate firms have also increased their investments in institutional-quality retail portfolios. Crow Holdings formed a $2.6 billion joint venture and retail real estate investment platform in May with its investment management business, Crow Holdings Capital, and a global institutional investor to acquire additional small-format, convenience-oriented, open-air, food and service shopping centers.