Amstar Talks U.S. Deals Following Split

As Amstar Advisers splits from affiliate Amstar Group—the principal investment arm of a European family office—managing director Rob Toomey speaks out about the firm’s current focus on U.S. value-added and opportunistic deals in retail and industrial.

Amstar Advisers is focusing its efforts on U.S. value added and opportunistic deals in the retail and industrial sectors in the wake of the split from its affiliate, Amstar Group.

The two firms announced the separation of the two entities in late October, telling investors the decision brings “focus” to the operations of both Amstar Group, created in 1987 to manage the real estate allocation of a large European family office, and Amstar Advisers.

Amstar Group, led by CEO Gabe Finke since 2003 and now led by former Black Walnut Capital managing principal Joseph Zuber, had expanded its remit to also raise commingled funds for U.S. and European emerging market investments, in countries such as Poland, Ukraine, Turkey, and Russia.

Amstar Advisers, which continues to be led by CEO Gabe Finke and managing director Rob Toomey, was founded in 2010 when the family office’s allocation to U.S. real estate exceeded its target allocation, according to Oregon Public Employees Retirement Fund (OPERF) documents. Since then, the firm has raised two $200M fully discretionary joint ventures with San Diego County Employees Retirement Association and OPERF.

Toomey tells PrivcapRE the split provides less distraction for each group.

“The objectives of the various stakeholders are different now,” he says. “For Amstar Advisers there is no change. We are the same team, we have the same strategy and we have less distraction as we are now just focused on value-added and opportunistic opportunities [exclusively] in the U.S. across all the property sectors.”

Investors have been “very supportive” of the move, Toomey adds. “What they like hearing is that it’s the same team, that there is less distraction from international [investments], that there’s more focus on the U.S. and that we have chosen to continue to align ourselves with institutional investors.”

That strategy is now guiding Amstar Advisers to focus on value-added and opportunistic deals not least in the retail and industrial sectors and particularly in the Southeast region of the U.S.

“It’s overgeneralizing, but we believe it’s late cycle [for] multifamily, it’s late cycle for office, and late cycle for hotel,” says Toomey. “We still think we’re early in industrial and retail so we’re spending a lot more time investing and underwriting in those two sectors, particularly in the Southeast markets of the U.S, which we see as still being early into the recovery stage. Those markets are very attractive to us.”

With 15 to 20 markets that “make sense” to Amstar Advisers, Toomey says retail provides a “fascinating” opportunity.

“There’s been so much multifamily development that some markets are now under-retailed because of that supply,” he says. Add to that population growth and obsolescence of existing inventory, not least malls, he continues, and retail “is poised for fundamental growth.

“When the markets start thinking that retail is finished because of things such as Amazon, we start looking at it a lot closer. The Internet is going to impact retail, of course, but at the end of the day customers love to touch and feel what they want to buy.”