Blue Owl Borrows $185 Million Backed by Retail Portfolio

Private credit firm Blue Owl Capital landed a $185 million loan tied to nearly two dozen retail properties in the Bay Area.

The New York-based firm secured the loan from French corporate and investment bank Natixis backed by 21 retail locations across the region, the Silicon Valley Business Journal reported.

Blue Owl has been selling off Save Mart stores in the Bay Area in recent years.

The portfolio includes shopping centers anchored by Save Mart, Lucky Supermarket and FoodMaxx grocery stores.

The 21 sites include four San Jose shopping centers as well as assets in Alameda, San Carlos, Watsonville, Hayward, San Leandro, Santa Rosa, Petaluma and other Northern California enclaves including Fresno, Auburn, Hollister, Merced, Oakley, Modesto and Sand City. Blue Owl’s real estate division manages the properties’ holding company, Save Mart Portfolio Owner Fund V CA LLC.

Blue Owl has been dealing with problems in its retail private credit business serving individual investors. News surfaced earlier this month that investors were looking to get out of some investments before maturity. So many investors have expressed interest in exiting deals that Blue Owl said it is permanently restricting withdrawals.

Last week, Blue Owl agreed to sell $1.4 billion of loans at 99.7 percent face value to four pension funds across North America. The firm will offload the debt to the California Public Employees’ Retirement System, Ontario Municipal Employees Retirement System, British Columbia Investment Management Corporation and Kuvare Holdings.

Besides retail properties, Blue Owl is also selling industrial sites. Earlier this month, Blue Owl Capital sold a former Big Lots distribution center in Pennsylvania to the Department of Homeland Security for $120 million. DHS has been snapping up warehouses across the country as part of its expansion efforts for its Immigration and Customs Enforcement detention facilities. — Chris Malone Méndez