Featured in The Wall Street Transcript’s Best CEO Interviews of 2015
David Lukes, CEO of Equity One, Inc. (EQY) told TWST this year the company’s asset quality, paired with management’s capacity to plan and execute plans for growth sets the company apart from the competition.
“I like to tell people that Equity One has three real benefits. We have an excellent inventory of high-quality assets, we have a management team with creative vision for our properties, and we have a proven ability to execute complex redevelopment projects. I’ve been here at Equity One now for just over a year. I’ve never seen a situation where I walked into a fully stocked kitchen,” he said.
Lukes said EQY‘s growth will come from existing properties.
“Between that inventory and vision and execution, most of our growth in the next few years is likely to be internally focused, which is a strategic advantage to most retail landlords. It’s a real differentiator. It’s hard to find a portfolio where you have an opportunity to buy and then reinvest, and we have that portfolio,” he said.
Lukes said the demographic shifts are positioning Equity One‘s properties in a once-in-a-generation chance to increase their properties’ value.
“A big difference between retail and other asset classes is that retail leases are very long in the shopping-center space, particularly grocery stores. I’ll give you an example. There is a grocery store that we bought in Bethesda, Maryland, which is a very leafy, beautiful suburb of Washington, D.C., and it was a 50-year lease. It comes due in 2019. So think of a time capsule of a property being built 50 years ago, and you as a landlord don’t have the right to change anything for 50 years. If you were to go to sleep and suddenly wake up 50 years later, the property looks the same, but the demographics around it have completely changed, the world has changed. So you have this once-in-a-generation chance to completely change a property, and the more of those that you can buy, the more you can invest in your own portfolio,” he said.
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