Blackstone Adding Showrooms to RE Platform

HIGH POINT, NC and LAS VEGAS—Blackstone said Thursday it had agreed to acquire International Market Centers Inc., the showroom owner/operator created from the merger of two competing operators. The purchase price was not disclosed; however, the 2011 creation of IMC represented a $1-billion investment by Bain Capital Partners and Oaktree Capital Management, and a 2016 CMBS issue to refinance the company's debt valued the real estate at about $1.5 billion, according to published reports.

“This marks an exciting time for International Market Centers,” says Robert Maricich, CEO of IMC. “While Bain Capital and Oaktree have been great partners for the past six years, we look forward to this new relationship and our next phase of growth. Blackstone is a firm with a strong track record of enabling transformational change and shares our long-term vision for the business.” Maricich had served as president and CEO of World Market Center, one of the two companies that were combined to form IMC, for three years prior to taking the helm at the combined organization.

Funds managed by Blackstone Real Estate Partners and Blackstone Tactical Opportunities are joining forces to acquire IMC, reportedly the world's largest owner and operator of premier showroom space for the furnishings, home decor and gift industries. Fireside Investments is also expected to partner with Blackstone in the acquisition.

“By leveraging the scale of Blackstone's platform and expertise in real estate investing, we look forward to partnering with IMC to help drive the company's continued growth in the years ahead,” says Tyler Henritze, a senior managing director in Blackstone's real estate group. All told, IMC has 12.2 million square feet of exhibition space in High Point, NC and Las Vegas, which is used as warehouse space by furniture companies when events are not being staged there.

At Bain Capital, managing director Ryan Cotton says, “In forming IMC, we combined a number of assets and made significant investments in the High Point and Las Vegas markets. Today the business is a clear leader in the industry, with capabilities and reach that provide best-in-class productivity for the buyers and sellers who attend those markets.”

An initial public offering was in the cards a few years ago, with the goal of IMC trading as a REIT. The company registered for an IPO in the summer of 2014; the following spring it filed paperwork for a public offering of up to $200 million, with shares selling at between $12 and $14 apiece. However, in December 2015 IMC withdrew its registration, citing “unfavorable market conditions” at the time.

“Having partnered with Bob Maricich and Bain Capital at the creation of IMC, we are enormously proud of the enduring and essential platform this management team has built,” says Kaj Vazales, managing director at Oaktree. “IMC is well-positioned for the next phase of growth as the nexus of commerce for the furnishing, home decor and gift industries.” Currently IMC is pursuing separate marketing strategies for the High Point and Las Vegas properties.

Allen & Co. LLC and Kirkland & Ellis LLP served as advisors IMC, Bain Capital and Oaktree. Simpson Thacher & Bartlett LLP served as advisors to Blackstone and Fireside. The deal is expected to close during the third quarter.