- PSP Investments and Nuveen Real Estate launched a joint venture with an initial $790M to buy open-air shopping centers anchored by grocers, necessity retailers and essential services.
- The partners have closed about 3M SF across 19 properties in eight states, including two portfolios of six centers (801,000 SF) and 11 properties (1.9M SF).
- PSP says it is narrowing U.S. retail exposure to grocery-anchored centers that deliver inflation-linked income, a bet on daily-needs tenants and high-barrier metros.
Two institutional investors are betting on groceries. PSP Investments and Nuveen Real Estate have formed a $790 million joint venture to buy open-air shopping centers across the U.S., according to Institutional Real Estate.
So far the partners have acquired roughly 3 million SF in 19 properties spread over eight states: Arizona, Colorado, California, Florida, Minnesota, Texas, Virginia and Washington.
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The Strategy
The venture focuses on centers anchored by leading grocers, necessity retailers and daily services. It also targets metros with growing populations and rising incomes. In these markets, new competition is difficult to build.
Julien Roy-Decary oversees Americas real estate investments at PSP. He said the pension investor is narrowing its U.S. retail holdings to grocery and daily-needs centers. These properties aim to provide steady, inflation-linked income.
What They Bought
The assets include two grocery-anchored centers. One is Shoppes of Lorton Valley, a 110,000-SF center anchored by Giant in Lorton, Va. The other is Las Tiendas Village, a 188,000-SF center anchored by Sprouts in Chandler, Ariz.
The venture also includes two portfolio acquisitions. The first covers six centers totaling about 801,000 SF. These properties span markets such as Dallas-Fort Worth, Fort Lauderdale, Los Angeles, Minneapolis, Orange County and San Diego.
The second portfolio includes 11 properties totaling about 1.9 million SF. They are located across California, Colorado and Washington.
Why It Matters
Nuveen Real Estate retail portfolio manager Brian Wallick said necessity-based retail has remained resilient through market cycles. Therefore, the venture pairs PSP’s long-term capital with the stability of everyday retail needs. Together, these factors support its strategy for durable income.
Other large investors are pursuing similar deals. For example, Phillips Edison recently extended its partnership with Northwestern Mutual. It also plans to move 13 centers into a venture expected to reach about $1.2 billion, as we covered in its grocery-anchored JV.
What’s Next
Hines Research views retail as an income and scarcity story after 480 million SF of U.S. retail space was demolished since 2000.
Meanwhile, Colliers’ Q3 snapshot shows investors remain focused on grocery-anchored and necessity-based properties. Private buyers also provide much of the sector’s liquidity.
With $790 million committed so far, the venture has room to grow. Watch for additional portfolio acquisitions as it expands.
