The Blackstone Group and Centro Properties Group finalized the sale of Centro's U.S. assets to Blackstone's affiliate BRE Retail Holdings Inc. yesterday. The deal, announced back in March, represents the largest sale of retail real estate since the downturn began. It might also serve as a bellweather of whether other sellers of large retail portfolios can find buyers for their assets.
According to the press release announcing the transaction, Blackstone paid approximately $9 billion for Centro's U.S. portfolio, which includes 585 community and neighborhood shopping centers totaling 92 million square feet. As part of the deal, Blackstone also picked up Centro's U.S. property management platform, which encompasses 18 offices and 600 retail real estate professionals.
Blackstone's plan appears to be to invest additional funds into repositioning and redeveloping the properties--and potentially sell them down the line, as Blackstone, and private equity players in general, don't usually view real estate as a long-term play.
In a statement, A.J. Agarwal, senior managing director with Blackstone, said:
The company is well-positioned today with an attractive portfolio comprised of strategically located assets in dense, infill markets with productive grocer anchors. We look forward to partnering with the Company's experienced management team to help them pursue the growth opportunity embedded within this portfolio.