Since joining Next Realty, LLC in 2006, Eteri Zaslavsky has been responsible for the execution of the company’s investment strategy. She has completed numerous transactions for the firm including fee simple acquisitions, note purchases and financings. Most recently, Eteri has expanded her role to focus on investor relations and raising capital for Next Realty’s future investment funds.
Throughout her career, Eteri has been active in all aspects of the commercial real estate business. Prior to joining Next Realty, Eteri worked at Allstate Investments, where she was responsible for originating commercial real estate loans and completed more than $550M in transaction volume. Earlier in her career, Eteri worked at The Tuckerman Group structuring equity and mezzanine debt transactions and also for the Capital Markets Group of Jones Lang LaSalle representing clients in disposition of over $725M in real estate assets.
Wendy: Hi, we’re here today with Eteri Zaslavsky of next Realty at the Bisnow event, Mixing It Up with Mixed Use. So today we wanted to ask Eteri, the question, have you invested in any multi use properties? How have you determined the value of the investment. And please share some examples with us.
Eteri Zaslavsky: Thank you for having me. So typically, when you think about mixed use, you might think about a high-rise building that has ground level retail, perhaps with the grocery store, or some service tenants parking either above it or wrapped around it. Perhaps an office or a medical office components and mid-rise and condos or apartments above. However, I would say in recent years, the definition of mixed use has really broadened. So the interweaving of retail, entertainment, medical office, office and other uses is really commonplace today. So a couple of years ago, we bought a traditional retail Lifestyle Center. So it had some restaurants, some soft goods tenants, and it was anchored by a two-story Barnes and Noble. The Barnes and Noble wasn’t doing great. So as part of our business plan, we replaced them at the time that was sort of a new phenomenon, but we replaced them with Northshore Medical Group. Today, actually, many of our neighborhood centers have medical as part of their rent role as part of their component. So what makes a mixed use property a good investment? it’s the diversity of the income stream, across different tenants from different industries. And so as you’re diversifying the income, you’re also diversifying the risk. So our focus today is on single-story, multi-tenant mixed use buildings. Last year, we bought four of those buildings in Indianapolis, and our tenants ranged from traditional office tenants that you think of like law firms, or technology companies or title companies. But more interesting that some of our tenants in the mixed use category required a variety of space options. So for example, one of our tenants is WoodCraft, they sell wood equipment for people that are either doing home improvements or hobbies. So they needed office, a showroom, as well as warehouse space. And we were able to accommodate that space need.
Wendy: That’s a great idea, a great idea.
Eteri: Thank you. And also in that four-building portfolio, I would say probably a third of our tenants are also medical. So Indiana University Health is one of the tenants, we have a pediatric clinic. And the benefit of having mixed use space is that when things don’t go as planned, you can sort of customize the space for a different user. So during the pandemic, one of our tenants, a technology firm, decided not to renew their lease and continue working remotely, we were immediately able to replace them with a physical therapy clinic with virtually no downtime. Maybe we were lucky but having space that you can customize and adjust and adapt to different tenants needs will prove to be beneficial for years to come.
Eteri: That’s my take on mixed use. Thank you for having me.
Wendy: Great Well it sounds like there’s also a live/play concept to it to a degree in that you’re you’re diversifying your portfolio, you’re reducing your risk Eteri, thank you so much for being with us today. And thank you
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