Bain Capital Teams With Harper’s 11North to Buy North American Shopping Centers

One of the largest private equity firms is making a push to buy North American shopping centers.

Bain Capital Real Estate announced Thursday it teamed up with 11North Partners to acquire and operate outdoor shopping centers across the U.S. and Canada. The partnership will focus on open-air retail investments with high concentrations of necessity-based tenants, such as grocery stores.

“Today, open-air retail centers benefit from a confluence of tailwinds and strong real estate fundamentals that create an attractive risk-return opportunity,” 11North founder and CEO Brian Harper said in a statement. “We believe historically low supply growth and increased demand for open-air shopping centers, driven by strong retail sales, persistent work-from-home trends, and the increased prevalence for omnichannel shopping, provide a favorable backdrop for the sector.”

A representative for the joint venture declined to share more details regarding the specific properties it was targeting or its target investment amount. 

Bain is one of the largest private investment firms in the world, managing some $180 billion. The firm’s decision to invest in the retail sector shows the growing appetite for the market after years of distress.

Brick-and-mortar retail has weathered the rise of e-commerce and pandemic lockdowns to rebound into an asset class investors want to get into, especially grocery-anchored properties in a higher interest-rate environment because they have generally healthy cash flows.

“We believe there are clear, emerging thematics that support the winning brands, retailers, and commercial real estate of tomorrow,” Ryan Cotton, the head of Bain Capital’s real estate division, said in a statement. “In convenience-oriented, necessity-based retail, we see a format that is well aligned with these themes, will continue to enjoy strong operating performance, and delivers strong results to tenants.”

Bain Capital’s partnership with 11North is not its only joint venture. A partnership between the firm and Staley Point Capital sold a 91,000-square-foot industrial property in Southern California’s San Gabriel Valley in early January for $38.4 million. 

A separate joint venture with Blue Vista, meanwhile, secured a $45 million loan later that month to refinance Vue53, a 267-unit student housing complex near the University of Chicago. 

Nick Trombola can be reached at ntrombola@commercialobserver.com.