TPG Leads Acquisition of Retail Landlord Echo Realty

One of the hottest sectors in all of commercial real estate is grocery-anchored retail. An investment group led by TPG is the latest to dive into the sector.

A joint venture including PSP Investments, La Caisse and Norges Bank Investment Management acquired operator Echo Realty at a roughly $2 billion valuation, Bisnow reported. The company counts more than 230 retail centers in its portfolio, primarily in the Midwest and Southeast.

Echo has acquired or developed more than 16 million square feet since its founding in 2000. Grocery store anchors are critical parts of the portfolio, a tenant roster including Giant Eagle, Publix, Harris Teeter, Safeway, Acme Markets and Whole Foods.

“With TPG’s investment and business building expertise, we are confident ECHO is well-positioned to capitalize on demand for necessity-based shopping in key, high-performing markets,” Echo Chief Executive Officer Thomas Karet said in a statement.

The joint venture plans to scale Echo’s business across both existing and new markets. The venture will work with Echo’s management team to expand the business’ leasing and property management arms, as well as the Echo Retail boutique brokerage.

With several international partners and the presence of TPG — which has $306 billion in assets under management — it’s the latest sign of belief in the grocery-anchored retail space.

Last month, Bain Capital Real Estate and 11North Partners’ joint venture acquired five open-air retail centers for approximately $300 million, a portfolio covering 757,000 square feet, which is 93 percent occupied and is filled by major tenants like Walmart, Costco, and Trader Joe’s.

The acquisitions follow a late last-year fundraise of $1.6 billion, which pushed the joint venture’s collective equity for the open-air retail operating platform past $2 billion. The fund, anchored by two unnamed global institutional investors, is focused on acquiring “generational grocery-anchored real estate” assets.

Slate Grocery REIT also recently formed a special committee to evaluate strategic alternatives following an unsolicited takeover bid from private affiliates of its external manager, Slate Asset Management.

The firm’s $2.4 billion portfolio consists of 15.2 million square feet across 23 U.S. states; nearly half of its properties are in the Southeast, and almost a fifth of its portfolio is occupied by Kroger and Walmart.

— Holden Walter-Warner