11North Partners, a newly formed retail investor, has partnered with Bain Real Estate Capital to acquire open-air retail properties in North America, especially those anchored by grocery stores or other necessity-based tenants.
Brian Harper, former CEO of RPT Realty, heads 11North, which he formed soon after overseeing the $2B sale of RPT to Kimco Realty, a deal that closed in January.
RPT was an open-air retail specialist. Its acquisition added 56 open-air shopping centers totaling 13.3M SF to Kimco’s existing portfolio of 527 properties.
“We believe historically low supply growth and increased demand for open-air shopping centers, driven by strong retail sales, persistent work-from-home trends, and the increased prevalence for omnichannel shopping, provide a favorable backdrop for the sector,” Harper said in a statement.
The partners declined to release a target investment total in response to a Bisnow query on Thursday morning about it, but since 2010, Bain Capital and its predecessor entity, Harvard Management Co., has invested about $7.7B in various property sectors. Bain Capital is one of the world's largest private investors, with about $180B in assets under management.
The overall retail sector, which slumped in the 2010s amid oversupply and weaker consumer demand, has shown more resiliency recently as consumer spending remains healthy. Demand for retail continues to outpace supply, according to Cushman & Wakefield's Q4 2023 report on the sector, which put the national vacancy rate for retail at 5.3%, the lowest since 2007.
Net absorption of retail space came in at 6.1M SF during Q4 2023, up 71% from the previous quarter, reports Cushman & Wakefield, which also notes that the average asking rent nationwide stood at $23.73 per SF at the end of 2023, up from just over $20 per SF at the beginning of the pandemic.
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