Primestor Properties

Year Founded: 1992

Core Business: Developing and managing shopping centers in Latino neighborhoods

Employees in 1992: 5

Revenue in 1998: $5 million

Revenue in 1999: $7 million

Goal: To mix mom-and-pop and national retail tenants in quality shopping centers

Driving Force: The need for better retail in Latino neighborhoods

By ELIZABETH HAYES

Staff Reporter

While many developers shun major retail projects in Latino neighborhoods as financially risky, one family-owned firm is thriving in those areas.

Primestor Properties has built or renovated numerous small shopping centers around Los Angeles, and recently started tackling more ambitious projects.

The West Hollywood-based firm just finished a $3 million center in a Lincoln Heights neighborhood that is fully leased, mainly to the national chains. It’s also starting construction on the $5 million, 100,000-square-foot Las Palmas center in Huntington Park.

And in Lynwood, Primestor is negotiating to buy a 6.5-acre site for a project in a retail-deprived neighborhood.

“My focus is to bring great quality projects and tenants to the Hispanic community,” said company founder and President Arturo Sneider.

Sneider expects revenue to grow to $7 million this year, compared to the $3 million generated during the firm’s first year in 1992.

In all, Primestor manages 35 retail properties and 150,000 square feet of industrial space. The company keeps most of what it acquires or develops but has sold a few properties over the years.

The company is aided by the fact that the 30-year-old Sneider was born and raised in Mexico City. Over the years, he believes he has developed a good feel for Latino shoppers, who, as it turns out, are not that much different from anyone else. That is, they focus on electronics, appliances, children’s clothing and toys and on affordable restaurants where the whole family can dine.

As a result, Primestor centers are an interesting mix of mom-and-pop stores and national retailers. The Lincoln Heights center has a Hollywood Video and a Radio Shak, as well as a Latino-owned jewelry store and Helados Pops Ice Cream shop that features flavors concocted from Costa Rican fruit.

To determine the best mix of tenants, Sneider asks locals at restaurants and gas stations about their shopping needs. He likewise identifies tenants by beating the bushes in nearby Latino neighborhoods, asking shop owners if they are interested in moving. “For lease” signs are posed in Spanish and ads are run in Spanish-language publications and on radio stations.

Sneider says the real challenge has been convincing national retailers to locate in those under-served neighborhoods. The process often requires extensive negotiations and generous improvement allowances so tenants can build out space with little or no risk.

“It’s taken time and effort to educate tenants to the enormous size of the market,” said Sneider. “There’s been a tremendous expansion in the Hispanic population, and it’s more sophisticated.”

He said enlisting tenants for his centers has become easier as more national retailers have moved in and found success.

“Those areas are some of the better ones for stores,” said David Church, Hollywood Video’s former director of real estate in the area. “The only issue is, you want to make sure security is good enough. With a guy like Arturo, he gets the right tenants and provides parking-lot lights. He’s creative in solving the needs and issues that come up.”

Convincing banks to lend money for Primestor’s projects also has been a trial-and-error process. Sneider has learned not to approach financial institutions until he has several credit tenants signed up otherwise the fees and interest rate would be too high.

“It’s better to self-finance until you’re at the point of financing conventionally,” Sneider said. “It’s become less difficult because cities and lending institutions (better) understand.”

While Primestor was founded only eight years ago, its roots go back more than two decades. Members of Sneider’s family were in real estate as investors from Latin America but never took a hands-on approach.

His father, who once owned a plastic manufacturing business in Mexico, invested in industrial properties in Florida and California as a hedge against the unpredictability of the Mexican economy. In the late ’70s, his father sold the business and moved the family to Florida and then California.

Meanwhile, Sneider’s father-in-law immigrated to Los Angeles in 1978 from Argentina and invested in shop spaces. Most notable were his stakes in buildings on Santee Alley and other garment buildings on Maple and Main streets downtown.

Sneider began managing, acquiring and developing properties for both families in the 1980s. But finding a way to make those disparate portfolios work together was a challenge.

Many of his initial projects were strip malls, but he also helped build single-family homes and condominiums. He decided to form Primestor in 1992 (at the age of 22) to have one brand-name entity that would encompass all the management and development activities.

Sneider now finds sites, negotiates acquisitions and handles leasing himself while his brother-in-law, Leandro Tyberg, oversees construction. Sneider’s father and father-in-law also invest in various projects.

The family connections make for an intense working environment.

“We’re all involved. Everyone is benefiting or hurting,” Sneider said. “Conversations at Sunday lunch will be about a project we’re involved in.”

During the real estate recession earlier this decade, Primestor acquired older retail properties that were improved and repositioned, including several along Western Avenue between Beverly and Santa Monica boulevards.

The company’s focus turned to ground-up development in 1997, specifically in Latino areas. “I don’t know the West L.A., Brentwood shopper,” Sneider said. “We have to stick to what we know.”

While he intends to keep pursuing new ground-up projects, Sneider said such developments are becoming more expensive and difficult to do, especially with more and more entrepreneurial developers competing for some of the same sites and tenants.

“We’re upset the rest of the world has figured it out. It was a niche thing,” Sneider said.