The former head of corporate real estate for Kroger Co. has started a private investment fund focused on acquiring grocery-anchored retail centers.
Nick Hodge, who was most recently Vice President of Corporate Real Estate for the Cincinnati-based grocery giant, launched Essential Growth Acquisition Properties (eGap) Funds. Hodge and his partners plan to raise $50 million from private investors and use those funds to buy grocery-anchored retail centers. He expects the first fund will be able to buy 10 to 15 properties, totaling about $170 million.
“Grocery-anchored centers are essential, that’s been proven and will continue to be proven even before the pandemic and well after,” Hodge told me.
Hodge is launching eGap Funds with Mike Margiotta, Matt Price and Richard Webb, who own a property management business, 1045 Real Estate. Headquartered in St. Louis and Dallas, 1045 is a national commercial real estate company that provides property management, accounting, leasing services and consulting to clients. 1045 provides its services to more than 3,000 properties across the U.S. totaling more than 80 million square feet. Hodge has worked with the 1045 team over the years, as 1045 provides its services for 200 shopping centers owned by Kroger.
Margiotta said he and the team are “humbled” to work with Hodge as CEO and principal of eGap Funds. “He is a very special person and perfect to build an amazing platform and continue a great story,” Margiotta said in an email.
When eGap Funds buy a property, it will use 1045 as the asset management company, helping to immediately provide scale. The plan is to look for properties nationwide. Hodge and team will be looking for a diversity of anchor tenants and geographic locations. In terms of geography, Hodge said they will look to cities that have benefited from population growth in the last couple of years.
Leaving Kroger was not an easy decision for Hodge, whose family has led the real estate department for the company for decades. Nick Hodge’s father, Jim, was head of real estate for more than 30 years. His grandfather started with Kroger in the 1930’s in the St. Louis market. Even though his dad is supportive of the move, he reminded Hodge this is a 90-year run coming to an end.
Hodge said every day at Kroger was like receiving an MBA on the job in real estate. “I have absolutely loved my run at Kroger,” he said. Hodge said his team at Kroger is ready to take the torch and make the grocer even better. Hodge’s last day with Kroger was Friday, Aug. 6. He publicly launched eGap Fund on Aug. 9.
The partners had started raising money from family and friends, which helped them put three shopping centers under contract. Hodge expects to close on those properties in the next 30 to 60 days. He’s also negotiating on a fourth property in the Greater Cincinnati region now.
Hodge also said he wants to build the business here in Cincinnati. The firm has signed a lease for a 2,400-square-foot office space at 312 Plum St. and will be moving there in the next couple of weeks. By the end of the year, the goal is to have six employees.
“I want to put roots in and build out something really special here in Cincinnati,” Hodge said. “It’s important we hire and have a good network here.”
Hodge said even though the grocery industry is changing more rapidly now than at any other time in his life, especially as the pandemic accelerated the trends of ecommerce and automation, he and his team believe grocery-anchored centers are still a good investment.
“Brick and mortar is absolutely here to stay,” he said.
