San Diego, CA – January 16, 2025 – As we step into 2025, the Equity Street Capital (ESC) team would like to extend our heartfelt gratitude to all who joined us at our recent open house in Charlotte, North Carolina in November. It was a pleasure to host you alongside our partners at Big V in their office. Your presence and engagement made the event truly special. For those who couldn’t make it, we’ve compiled a short recap with pictures from the event. Check it out here.
The past year brought challenges and opportunities as we adjusted our portfolio to navigate the evolving commercial real estate landscape, characterized by elevated interest rates and increased operating costs. Here are some highlights from 2024:
Merchants’ Square and Johns Creek Town Center: We acquired two open-air retail shopping centers, adding over 500,000 square feet to our portfolio.
Texas Development Opportunity: Last quarter, we closed on a promising development project in Texas. Stay tuned for details as we plan to present this as a new investment opportunity in the coming months.
Full-Cycle Investments:
Oaks on Marketplace (Austin, TX)
Northpoint Villas (Fort Worth, TX)
Shoppes at Woodhill (Columbia, SC)
These assets reached the end of their hold periods, and our team successfully executed their sales.
The Markets at Town Center (Jacksonville, FL): Originally acquired in November 2021, this property was sold in early 2025. The decision to sell was driven by limited prospects for increased cash flow amid the current interest rate environment, coupled with potential tenant turnover risks and upcoming amortization costs. Despite these challenges, the property’s rent per square foot increased from $22.22 at purchase to $29.25 at the time of sale, with a maintained occupancy rate of 98%.
The Shoppes at Woodhill (Columbia, SC): This property’s sale in December 2024 marked the conclusion of its investment cycle. Notably, investors received a full return of their capital within the first year of ownership, with additional proceeds deferred by the Management Team to prioritize distributions to LPs.
The Federal Reserve’s interest rate adjustments were a focal point in 2024, with three rate cuts (50 basis points in September, 25 basis points in November, and another 25 basis points in December). While these changes offer some relief, the outlook for 2025 suggests rates will remain elevated, impacting operating costs and property valuations across the commercial real estate sector. The gap between buyers and sellers persists, but transaction volumes in 2024 exceeded those of the prior year and are projected to increase in 2025.
Our unique portfolio and presence in desirable markets position us for continued success in 2025. Here’s what lies ahead:
Portfolio Performance:
Florida Office Portfolio: Ended 2024 at 92% leased, with 32,000 square feet of new leases signed.
Retail Portfolio: Achieved a 95% weighted lease rate, with key tenants like TJ Maxx, Barnes & Noble, Wells Fargo, Rally House, and Homegoods.
Multifamily Portfolio: Maintained a weighted lease rate of 92%, despite competition from new supply.
Strategic Decisions:
We will continue stress-testing properties, adjusting business plans, and exploring opportunities to consolidate debt or sell select assets to optimize returns.
Our disciplined approach will guide acquisitions, particularly those arising from distressed debt and motivated sellers.
Networking and Relationships:
Leveraging trusted relationships and a strong network remains a key advantage in identifying and executing unique opportunities in the market.
To provide detailed updates on our portfolio and the market outlook, Equity Street Capital will hold our annual investor conference virtually.
This year’s conference will retain the flexible virtual format introduced last year, allowing investors to review property updates at their convenience. The live event will be recorded and uploaded to your investor portal for those unable to attend. Investors, please keep an eye on your email for more details.
As we embark on a new year, the Equity Street Capital team remains committed to delivering value and adapting to the evolving market. Thank you for your continued trust and partnership. Here’s to a successful and prosperous 2025!
About Equity Street Capital: Equity Street Capital (ESC) is a San Diego-based commercial investment firm renowned for its focus on achieving attractive risk-adjusted returns while maximizing long-term capital appreciation. Founded by real estate investors and entrepreneurs Than Merrill and Paul Esajian, Equity Street Capital is dedicated to providing transformative real estate investment opportunities to it’s investors.
