Horizon Group Properties Expands Portfolio with Acquisition of Lincoln City Outlets

Rhea-AI Summary

Horizon Group Properties (OTC: HGPI.pk) acquires Lincoln City Outlets for $35.25 million, enhancing its portfolio with a popular shopping destination in Oregon. The center features over 50 retail stores, restaurants, and venues, including renowned brands like Nike, Coach, and North Face. The acquisition aligns with Horizon's strategy of targeting strong tourist destinations, aiming to leverage its expertise in retail operations to drive growth.

Insights

Market Research Analyst

The acquisition of Lincoln City Outlets by Horizon Group Properties represents a strategic expansion into a region with a strong tourism industry. From a market research perspective, the location's appeal to both tourists and local residents can lead to increased foot traffic and sales. The presence of national retailers like Nike and Coach alongside local businesses suggests a diverse tenant mix that can cater to a wide range of shopping preferences.

It's essential to assess the competitive landscape in the area. The proximity to attractions like Chinook Winds Casino and Salishan Golf Resort could create a symbiotic relationship where each venue benefits from the other's traffic. However, the success of this acquisition will largely depend on Horizon Group's ability to effectively manage the property and implement marketing strategies that resonate with the target consumer base. The company's experience in outlet center operations could be a significant advantage in optimizing the center's performance.

Financial Analyst

From a financial standpoint, the $35.25 million investment in Lincoln City Outlets should be scrutinized in terms of its potential return on investment (ROI) and how it fits into Horizon Group Properties' portfolio. The acquisition's financing structure, through a joint venture, suggests a shared risk and potential for shared reward with LC Outlets JV, LLC. Horizon's role as the managing member indicates a lead position in operational decisions, which could be pivotal in driving the property's financial success.

Investors and stakeholders will be interested in the projected cash flows from leasing activities, management efficiency and the long-term value appreciation of the property. The addition of new businesses like Gilgamesh Brewing is a positive indicator of the outlet's growth trajectory. However, the broader retail industry's trends towards e-commerce and the specific challenges faced by outlet centers must be considered when evaluating the long-term profitability of this investment.

Real Estate Investment Analyst

The real estate aspect of this acquisition involves analyzing the property's location, tenant mix and potential for appreciation. Lincoln City, Oregon, as a tourist hub, offers intrinsic value due to consistent visitor traffic, which can bolster real estate prices and rental income. The open-air concept of the outlet is particularly appealing in the post-pandemic era, where consumers may prefer outdoor shopping experiences.

Examining the property's condition, occupancy rates and the cap rate (capitalization rate) at the time of sale would provide deeper insights into the investment's soundness. It's also crucial to evaluate the terms of the joint venture agreement, as they will dictate the management and profit-sharing structure between Horizon Group Properties and LC Outlets JV, LLC. Any plans for property development or enhancements could further influence the asset's value and attract additional high-profile tenants.

MUSKEGON, Mich., Feb. 15, 2024 /PRNewswire/ -- Horizon Group Properties (OTC: HGPI.pk), a leading operator of outlet shopping centers, is thrilled to announce the acquisition of Lincoln City Outlets. This open-air outlet center, located in the picturesque city of Lincoln City, Oregon, has established itself as a favorite shopping destination for tourists to the Oregon coast and residents of the surrounding communities. The center boasts over 50 retail stores, restaurants, and venues, offering a combination of national and local retailers, including Nike, Coach, Pendleton, North Face, Eddie Bauer, Scout Northwest Trading Company, Salt, Point Break Fitness and more. 

Horizon Group Properties completed the acquisition of Lincoln City Outlets for a total of $35.25 million. The property has been acquired through a joint venture, with HGP and LC Outlets JV, LLC.  HGP will act as the managing member and undertake the leasing, management, and marketing responsibilities for the property on behalf of the joint venture. Recognizing the untapped potential within the center, Horizon firmly believes in its future growth prospects. Already demonstrating substantial progress, Lincoln City Outlets has welcomed notable additions to its roster of businesses, highlighted by the recent opening of Gilgamesh Brewing.

"We are excited by this acquisition and will utilize our vast expertise in retail operations, leasing, and marketing to further improve this great retail destination," stated Gary Skoien, President and CEO of Horizon Group Properties. "The addition of Lincoln City Outlets aligns with our long-term strategy of acquiring outlet centers in regions that are strong tourist destinations."

Lincoln City is a premier tourist destination along the stunning Oregon coast, renowned for its breathtaking beaches spanning over 7.5 miles. Visitors can indulge in various accommodation options, including vacation homes, beachfront rentals, and ocean-view hotels. The area is further enriched by nearby attractions such as the Chinook Winds Casino, the Salishan Golf Resort, and a range of wineries. As a result, Lincoln City attracts visitors from both Oregon and Southwest Washington, who come for day trips, weekend getaways, and extended stays throughout the year.

About Horizon Group Properties

Horizon Group Properties Based in Muskegon, MI, Horizon Group Properties, Inc. (OTC:HGPI.PK) is an owner and developer of outlet shopping centers in the U.S.,  third party property manager, and developer of a master-planned community in suburban Chicago. Additional information can be found at www.horizongroup.com  

View original content:https://www.prnewswire.com/news-releases/horizon-group-properties-expands-portfolio-with-acquisition-of-lincoln-city-outlets-302063400.html

SOURCE Horizon Group Properties, Inc.

FAQ

What is the name of the company mentioned in the press release?

Horizon Group Properties

Where is Lincoln City Outlets located?

Lincoln City, Oregon

How much did Horizon Group Properties pay for the acquisition of Lincoln City Outlets?

$35.25 million

Which brands are featured at Lincoln City Outlets?

Nike, Coach, Pendleton, North Face, Eddie Bauer, and more

What is Horizon Group Properties' strategy regarding outlet centers?

Acquiring outlets in strong tourist destinations