Blackstone Secures $2.8B CMBS to Finance $4B Acquisition of Retail Opportunity

Blackstone has secured a $2.78 billion commercial mortgage-backed security (CMBS) that will be financed for its $4 billion acquisition of Retail Opportunity Investments Corporation (ROIC), which it completed earlier this month.

The floating interest rate loan is anticipated to start with a two-year term. It also includes three extensions for 12 months, according to a report from credit agency KBRA. Blackstone will be required to make interest-only payments each month.

The ROIC total portfolio consists of 93 West Coast shopping centers, taking up a total of 10.5 million square feet. The bulk of the loan balance is concentrated in California (66 percent), according to KBRA. That's followed by 22.3 percent and 11.7 percent in Washington State and Oregon. This includes major markets like Los Angeles, San Francisco, Portland, and Seattle. Some big tenants in the REIT's portfolio include grocers Safeway and Ralphs. As of December, the ROIC properties were 95.6 percent leased to more than 1,400 tenants.

The move by Blackstone comes as it is exploring a big bet in Manhattan. While the deal hasn't closed yet, Reuters reported this month that the private equity giant was looking to purchase a sizable stake in office property 1345 Avenue of the Americas, and sought a $800 million loan to fund it. Also, in Manhattan, Blackstone made a $198 million acquisition for a SoHo retail portfolio in November.

Recently, CBRE revealed that New York's Tri-State region's investment sales slumped by 2.6 percent to $33.4 billion in 2024. Retail, particularly, was one of the asset classes that was a leader in the declines, seeing a 13.1 dip. However, CBRE is bullish about the Tri-State area in 2025. It expects multiple elements, including strong consumer spending and business-friendly policies to drive investment activity. The hope is that the only bodes well for retail — but all asset classes across the board.