NEW YORK CITY-A Blackstone Group affiliate has completed the acquisition of the US assets of Centro Properties Group for $9 billion. As GlobeSt.com previously reported, the assets consist of neighborhood shopping centers--numbered at 585--and other retail assets. A total of 92.1 million square feet of space is included, across 39 states.
The affiliate, BRE Retail Holdings Inc., beat out multiple bidders for the portfolio--including Starwood Capital and Morgan Stanley Real Estate Fund VII. For Centro, the deal closing means the freedom to focus on addressing concerns at the retail properties, such as high vacancy rates, Centro Properties Group CEO Michael Carroll tells GlobeSt.com.
"A key component of this is that, since we no longer distribute our earnings to our parent company in Australia, we have the ability to utilize the cash flow that comes off the properties to reinvest back in the assets and that allows us to have more capital available for tenant improvement dollars and more capital available for repositioning and redeveloping our assets," Carroll says. "That's been one of the constraints that has been on the company over the last three and a half years. We just haven't had excess capital to be able to deal with the vacancy that we've had."
Carroll and the six other members of the company’s management committee will stay on, he says, as the platform continues on with the same team and same name. Carroll declines to say precisely why Blackstone won out, but does tell GlobeSt.com that it was "the party that offered surety of execution," which was the main deciding factor.
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