Blackstone To Pay $4B For West Coast Shopping Center REIT

Blackstone is expanding its presence in the U.S. shopping center sector with a new acquisition, part of a renewed interest in retail that has driven several of the firm’s decisions in recent months.

Shopping carts
Blackstone Will Purchase Retail Opportunity Investments Corp., A Reit That Owns 93 Grocery-Anchored Shopping Centers Across The Western U.s.

The world’s largest alternative asset manager will spend $4B to purchase Retail Opportunity Investments Corp., a San Diego-based REIT that owns 93 grocery-anchored properties in cities like Los Angeles, San Francisco and Seattle.

Blackstone agreed to pay $17.50 per share, 34% more than ROIC’s closing price on July 29, the day before news of a possible deal first broke, the company said in a release.

ROIC’s 10.5M SF of retail space across the western U.S. was 97% leased at the end of September, according to the REIT’s third-quarter earnings report released last month.

“The sector is experiencing accelerating fundamentals, benefiting from nearly a decade of virtually no new construction, while demand for brick-and-mortar grocery stores, restaurants, fitness and other lifestyle retailers remains healthy,” Jacob Werner, co-head of Americas acquisitions at Blackstone, said in a statement.

The all-cash transaction will be carried out via Blackstone Real Estate Partners X. It’s expected to be finalized sometime in Q1 2025.

ROIC’s stock rose from $16.65 to $17.33 per share after news of the deal began circulating on Wednesday.

The REIT is in far better shape than it was when news about the potential sale first broke this summer. At that time, the company’s stock had fallen by more than 10% over the year prior.

Retail hasn’t been Blackstone’s primary focus over the last decade, but that stance has shifted in recent months.

“The headline is that it's going to be an interesting year to invest in retail real estate,” Blackstone Senior Managing Director Andrea Drasites said during the World Retail Congress in Paris in April.

“You have geopolitical disruption, you have the new normal of a higher interest rate model, which changes the balance sheet. Also, you have the choppy consumer, who is still relatively wealthy around the world but has less disposable income. You have to have conviction in the theses and the data. You can't wait.”

Her comments came shortly after Blackstone completed the £227M acquisition of a block on Bond Street, a high-end commercial area in London. The space is leased to luxury watchmakers Breitling and Audemars Piguet and the shoemaker Church's.

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