Blackstone is close to finalising a USD 3.4 billion acquisition of Retail Opportunity Investments Corp (ROIC), a leading U.S. shopping centre owner. ROIC, which owns 93 centres mainly leased to supermarkets and drugstores, reported a 13.8% rent increase in the latest quarter, benefiting from strong demand in the retail sector. With U.S. shopping centre vacancies near historic lows, ROIC has become a highly attractive target for buyout firms like Blackstone. If completed, this acquisition will further expand Blackstone's substantial real estate portfolio in the U.S.
Blackstone, one of the world's largest real estate investors, is reportedly in advanced discussions to acquire Retail Opportunity Investments Corp (ROIC), a U.S.-based owner of shopping centres, in a transaction valued at USD 3.4 billion, including debt. Sources close to the matter revealed that a deal could be finalised in the coming weeks, although the outcome remains uncertain, and other potential buyers may still emerge.
ROIC, headquartered in San Diego, owns 93 shopping centres, totaling around 10.5 million square feet, and primarily leases space to supermarkets and drugstores. The company has performed well in recent months, achieving a 13.8% increase in rents on same-space new leases in the third quarter. This profitability boost aligns with broader trends in the retail real estate market, where owners of strip malls and retail properties have benefited from high inflation, passing increased costs to consumers.
In addition to Blackstone, other private equity firms, including Bain Capital, have shown interest in ROIC. Earlier this year, Bain Capital partnered with 11North Partners to pursue acquisitions in North America's open-air retail market. Despite Bain's interest, Blackstone is currently seen as the frontrunner in the bidding process.
ROIC's net income rose significantly in its latest quarterly report, reaching USD 32.1 million for the period ending September 30, compared to USD 8.4 million in the same period last year. Shares of ROIC have increased by approximately 11% this year, making it an appealing acquisition target, especially with U.S. shopping centre vacancies at a historic low of 5.4% as of Q3, according to Cushman & Wakefield.
Blackstone, which manages USD 336.1 billion in real estate assets, has shifted its focus in recent years to warehouses, rental housing, and data centres. However, a strategic acquisition of ROIC could add high-quality retail assets to its portfolio amid limited new construction in the retail sector. This year has seen a muted real estate market, with U.S. merger and acquisition volumes falling by 39% due to high borrowing costs.
If successful, this acquisition would mark Blackstone's latest move in the U.S. real estate market following its USD 10 billion acquisition of Apartment Income REIT earlier this year.
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