Blackstone's Newest Investment Sector: Highway Rest Stops

Apparently, it’s not enough for an investment giant like Blackstone to rake in millions by flipping skyscrapers like pancakes—now they’re starting to collect the loose change in your pocket when you stop for a cup of Joe at a highway rest stop.

Blackstone Infrastructure Partners acquired a majority stake in the Irish gas station and convenience store chain Applegreen at the end of 2020 when Applegreen went private in an $878M deal that left the Dublin-based company’s founders with a 41% share.

Shortly after the deal closed, Applegreen was able to leverage its financial backing from Blackstone to submit the winning bid for a high-profile contract to operate 27 rest stops on the NY State Thruway. Some big bucks were need to seal the winning deal: Applegreen and its partners are picking up the entire tab for a $450M redevelopment of the rest stops on NY’s primary transportation artery.

In return, the company received a 33-year lease to operate food outlets as well as its convenience stores at the rest stops. The remodeling began at the beginning of last year and is expected be completed by next year.

According to a report in the NY Times, the company is modernizing the rest stops into spacious structures with two-story-high glass entrances, lots of communal space and indoor shrubbery. Food and drink offerings at the redesigned rest stops are emphasizing local artisan-type products presented under a slogan shouted in two-foot high letters on the walls: “EAT LOCAL. DRINK LOCAL. TASTE NEW YORK.”

In other words, if you’re craving a Big Mac on your trek up the Thruway—FUHGEDDABOUDIT.

That’s right, McDonald’s has been banished from NY Thruway rest stops. All of the McDonald’s outlets on the Thruway were closed on Dec. 31, when the fast-food chain’s contract with the NY State Thruway Authority expired.

According to the Times report, the redevelopment project was the result of a survey of more than 2,600 drivers conducted by the Thruway Authority five years ago, which the authority says revealed that more than half wanted “local artisan” offerings in “food halls.” Respondents also complained about unappealing interiors at the rest stops, which were said to offer few “Instagrammable moments,” the report said.

Nobody asked these motorists if they wanted to fire the toll collectors on the Thruway and replace them with electronic tolls, but that’s a done deal. Now everybody has more loose change to spend at the rest stops.

The redesigned rest stops won’t be completely bereft of fast food—Chick-fil-A and Shake Shack will be there—but the emphasis is on local farm stands and other artisan-type offerings in a modernized venue.

The Times article spewed a lot of ink waxing nostalgically about the loss of what it called the “egalitarian, socially equalizing experience” of scarfing down McDonald’s—and Howard Johnson’s before it—at dingy highway pit stops.

This from a newspaper that covered the travails of regular people at the beginning of the pandemic by publishing a front-page feature about how all the regular people in New York City were have a really difficult time “adjusting” to living in their second homes in the Hamptons after they deserted NYC.