Blackstone is in discussions to acquire Retail Opportunity Investments Corp (ROIC), a REIT that specializes in shopping centers, according to sources familiar with the matter who spoke exclusively with Reuters.
ROIC, which owns and operates 85 shopping centers primarily in coastal areas of the western United States, has a market value of approximately $1.5 billion. But its shares have lost more than 10% of their value in the last 12 months, making it an attractive acquisition target. The company's portfolio focuses on necessity-based retail properties anchored by supermarkets.
The potential deal is still in its early stages, and there is no certainty that an agreement will be reached. Both Blackstone and ROIC have declined to comment on the matter.
But the move is pure Blackstone in that it aligns with its strategy of investing in real estate sectors that are expected to benefit from long-term trends. With that as its guiding principle, the firm has been particularly active in areas such as rental housing, logistics, and life sciences real estate. Indeed, Blackstone has become the world's largest private investor in logistics, connecting the e-commerce revolution with warehouse demand. And earlier this year, Blackstone took AIR Communities private in a $10 billion deal.
Blackstone has been very bullish on the current real estate cycle, with executives telling reporters in numerous interviews that now is the ideal time to invest in certain asset classes.
"If you take a step back, we look at the real estate cycle, and yes there's been bad news: higher interest rates and challenges in the office business," Global Co-Head of Blackstone Real Estate Nadeem Meghji told Bloomberg Television last month. "But we believe that bad news is now priced into asset values, values are bottoming. Now is the time to play offense."
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
