TPG Capital selling SoCal-based Gelson’s Markets

Tokyo-based firm acquiring specialty chain, which has 27 stores in California

PPIH President & CEO Naoki Yoshida and TPG Capital Partner Paul Hackwell (Linkedin, Getty)
PPIH President & CEO Naoki Yoshida and TPG Capital Partner Paul Hackwell (Linkedin, Getty)

TPG Capital is selling the Gelson’s Markets chain, which now includes 27 specialty stores in Southern California, after what had been a turbulent year for the private equity firm.

Tokyo-based Pan Pacific International Holdings is buying the Encino-based Gelson’s, which was founded in 1951.

Gelson’s announced the deal Tuesday and said it expected to close in the second quarter. Terms were not disclosed. The deal was first reported in the Los Angeles Daily News.

TPG acquired Gelson’s in 2014 as part of its wider acquisition of parent company Arden Group, which had owned the chain since 1966. TPG expanded Gelson’s from 17 stores; all are still in California and the majority are in L.A. County and surrounding areas.

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Pan Pacific is publicly traded and worth around $4 billion, with retail being its largest business. The company operates 638 stores worldwide, including 582 in Japan. Its best known brand is the Don Quijote discount store chain, which also operates in Hawaii.

TPG leased some Gelson’s properties and owned others. In 2019, the firm sold a 1.3-acre property underneath a Gelson’s store in West Hollywood to Safco Capital in a leaseback deal. A Gelson’s-anchored shopping center in Manhattan Beach sold for $52 million the same year, making it one of the largest retail deals in L.A. County that year.

The pandemic spurred TPG to make some big real estate moves last year. Its nonbank mortgage lender TPG Real Estate Finance Trust ran out of cash in the spring, and missed loan payments as a result. In May, TPG RE Finance sold off $1 billion in commercial real estate debt to raise cash to meet its obligations.

[LADN] — Dennis Lynch