CMBS Loan to Fund Blackstone’s $4 Billion Takeover of Grocery Center REIT

Blackstone’s Strategic Move into Grocery-Anchored Retail

Blackstone is set to complete the acquisition of ROIC, which owns 93 grocery-anchored shopping centers across the West Coast. Following the deal’s closure, lenders will issue a CMBS offering secured by all 93 properties, signaling confidence in the sector’s long-term stability.

The financing is being structured by major financial institutions, with Morgan Stanley, Citi Real Estate Funding, Bank of America, and Wells Fargo finalizing terms. Morgan Stanley will lead the CMBS offering, further reinforcing the institutional backing behind the transaction.

ROIC’s Retail Footprint and Market Position

As of September 30, 2024, ROIC owned 10.5 million square feet of shopping centers, with a portfolio concentrated in Los Angeles, Seattle, San Francisco, and Portland. These high-density, urban locations have proven resilient in shifting market conditions, making them attractive investment assets.

Investor demand for grocery-anchored retail centers has surged as Federal Reserve rate cuts have stabilized borrowing costs. Unlike traditional retail spaces, grocery-anchored properties tend to maintain strong tenant retention and foot traffic, making them a reliable asset class for institutional investors.

Why Blackstone is Betting on Grocery-Anchored Centers

Blackstone sees strong growth potential in necessity-based retail, which has benefited from nearly a decade of minimal new construction. With e-commerce-resistant tenants and strong consumer demand, grocery-anchored centers offer long-term revenue stability.

By leveraging CMBS financing, Blackstone is ensuring cost-effective capital deployment while capitalizing on renewed investor confidence in retail real estate.

Source:CoStar