Asana Partners eyes fix-up projects in hot urban sites
By Steve Cranford
For now, buying small chunks of trendy neighborhoods in Charlotte, Raleigh and other hot spots may be less involved than the deals Terry Brown and Jason Tompkins worked on during long careers at Columbia, S.C.-based developer Edens. But having raised $500 million, it’s clear some big investors expect their Charlotte-based Asana Partners real-estate firm to make its mark.
Asana will leverage the money to buy up to $1.2 billion of retail property, but not the typical strip centers with big-box stores or suburban malls. Instead, the company is buying properties in strong urban markets that are less threatened by online retailers, says Sam Judd, chief investment officer. Think of a property with a gym, a clothing boutique and a restaurant that’s flanked by neighborhoods that generate pedestrian traffic.
The concept is nothing new for Asana Chief Executive Officer Brown, Tompkins, who is chief operating officer, and Judd. They spent nearly a decade together at Edens. Joe Edens started the business in 1966 and focused on grocery-anchored centers for many years. Brown, 55, became CEO in 2002 and led an expansion that included hiring business graduates of Harvard and other top colleges, he told The New York Times in 2012. Tompkins, 46, was CFO for 11 years, while Judd, 40, spent nine years leading the company’s Northeast region.
At their departure in 2015, Edens owned 136 retail centers totaling $6 billion in value. Recognizing an opportunity for a startup investment-management company with retail real-estate skills, they haven’t wasted time. The 23-employee company has bought more than a dozen properties in the last year, including sites in Atlanta, Charlotte, Dallas, Nashville and Austin, Texas, and Washington, D.C. Many properties lack institutional management, providing an opportunity for Asana to tweak the tenant mix and raise lease rates.
The template is similar to the Edens-owned Park Road Shopping Center, Charlotte’s first open-air suburban retail development that opened in 1956 and is home to a funky mix of small shops and larger tenants. Charlotte attorney Porter Byrum had owned the center for 44 years until he donated it to Wake Forest, Wingate and Queens universities in 2011. (Byrum died in March at 96.) Edens paid $82 million for the property in 2012. Since then, the center has spruced up its signage and attracted new tenants including gourmet-burger chain Shake Shack, opening later this year.
Asana can duplicate that strategy because of its owners’ track record, says Geoff Millerd, head of retail investment sales at Newmark Knight Frank in Boston. “They are incredibly talented people” who built Edens “from a very small platform to one of the best retail operators in the country.”
Asana can profit by buying from “mom and pop owners who inherited [properties] and have no pressure to maximize rents, or they’re not aware of the best tenant mix,” Millerd says.
An example of the firm’s approach is Design Center of the Carolinas, a 167,000-square-foot complex in Charlotte that Asana bought in late 2016 for $42.7 million. Mainly leased for offices, it has one retail client, a restaurant. Asana plans to convert at least half the space to retail, including restaurants and entertainment venues that open to a large interior courtyard.
Design Center is in Charlotte’s hot South End, where 6,000 apartments have been built in the last five years or are under construction. “We bring decades of experience of knowing what retailers are looking for,” Tompkins says.
While Asana declines to identify its 21 investors, industry publications report that the New Mexico State Investment Council made a $75 million commitment, while pension funds representing the state of Michigan, Ohio police and fire workers, and Los Angeles city employees also have invested. The three partners aim to generate annual returns of 11% to 13%, typically holding properties as long as eight years. “If a property has long-term leases that can’t be changed in that time, then it’s not an opportunity for us,” Tompkins says.
Asana is a yoga term reflecting a proper balance of mind, body and soul, and Judd foresees many years of peaceful cooperation. “This is our last stop careerwise,” he says. “We have created a generational, sustainable company.”
Photo of Asana Partners’ three principals are, from left, Terry Brown, chairman and CEO; Sam Judd, chief investment officer; and Jason Tompkins, president and chief operating officer.