Bain Capital Real Estate and 11North Partners bagged 10 open-air shopping centers for $395 million, with the portfolio heavily weighted toward the Sunshine State and specifically South Florida, The Real Deal has learned.
Boston-based private equity firm Bain and New York-based retail investment firm 11North bought nine plazas in Florida, five of which are in Broward and Palm Beach counties, according to the buyers’ news release. One property is in Charleston, South Carolina.
“The NOI [net operating income] is definitely majority in South Florida. It’s over 50 or 55-plus percent in South Florida,” said Martha Kelley of Bain.
Entities tied to Newark, New Jersey-based PGIM Real Estate, the real estate arm of Prudential Financial’s global investment manager PGIM, sold the South Florida shopping centers, according to records.
JLL will take over management of the properties from Coral Gables-based commercial real estate firm Southeast Centers.
This was an all-cash deal, and the buyers plan to secure a loan in the future, Kelley said.
The Broward properties include: the 217,000-square-foot Sawgrass Square at 12500 West Sunrise Boulevard in Sunrise; the 154,000-square-foot Plantation Promenade at 10065 Cleary Boulevard in Plantation; and the 84,000-square-foot Miramar Commons at 11000 Pembroke Road in Miramar, according to records.
In Palm Beach County, Bain and 11North purchased the 29,000-square-foot Lake Worth Plaza at 4360 State Road 7 in an unincorporated area of the county near Wellington; and the 143,000-square-foot Garden Shops at Boca at 7060 West Palmetto Park Road in an unincorporated area of the county near Boca Raton.
Elsewhere in Florida, the portfolio consists of three plazas in Kissimmee. They are the 160,000-square-foot Rolling Oaks Commons; the 86,000-square-foot Promenade at Poinciana; and the 38,500-square-foot Solivita Marketplace. In Tampa, Bain and 11North bought the 94,000-square-foot New Tampa Center.
The South Carolina plaza is the 75,000-square-foot Point Hope Commons in Charleston.
The portfolio has an occupancy of more than 93 percent, the release says.
A Publix store anchors Sawgrass Square, Plantation Promenade, Miramar Commons, Garden Shops at Boca, Promenade at Poinciana, New Tampa Center and Point Hope Commons. Other tenants at the properties include Chick-fil-A, McDonald’s, Starbucks, Bank of America and Chipotle.
“We speak with tenants on a daily basis. Florida is one of the highest markets where they want to expand to,” said Brian Harper, CEO of 11North.
Bain Capital, founded in 1984, has roughly $185 billion of assets under management, according to its website. It invests across business lines, including real estate, tech, life sciences, crypto, credit, and private and public equity. Ryan Cotton leads Bain’s real estate division.
Bain Capital Real Estate purchased the portfolio through one of its funds and will eventually syndicate a portion of the portfolio to a global limited partner, said Kelley, declining to name the partner.
11North was founded last year by Harper, following Kimco Realty’s acquisition of RPT Realty, where he was CEO. 11North staff members are formerly of RPT. Bain Capital has an ownership stake in 11North.
Last year, Bain Capital Real Estate and 11North formed a joint venture to invest in retail, especially open-air shopping plazas. The Florida and South Carolina portfolio marks the joint venture’s second purchase. In June, it paid about $212 million for three shopping centers in Oklahoma City, according to a release announcing the deal at the time.
South Florida’s retail market showed signs of softening in the second quarter, as vacancy rates creeped up, and the average asking rent slightly decreased, according to a Colliers report. Broward’s vacancy hit 4.1 percent, up from 3.8 percent during the second quarter of last year, while Palm Beach County’s hit 4.4 percent, up from 3.6 percent. Palm Beach County’s average asking rent dropped to $28.85 per square foot from $29.51 a square foot, year-over-year. Broward still experienced an increase of the average asking rent to $28.52 a square foot, from $27.78 a square foot, year-over-year, according to the report.
Grocery-anchored shopping centers have proven to be resilient, and investment sales of these properties continue. Last month, Boston-based Longpoint paid $34 million for the Presidente Supermarket-anchored Miramar Parkway at 3176 South University Drive in Miramar.
In June, Barry Sternlicht’s Starwood Capital Group sold the Whole Foods-anchored Marketplace at the Outlets shopping center at 1821 Palm Beach Lakes Boulevard in West Palm Beach for $133.2 million.
Publix also has been purchasing its standalone supermarkets and shopping centers anchored by its stores. Over the past year, the Lakeland-based grocer has paid about $273 million for these properties, including $25 million in March for its store and a Starbucks outparcel at 2501-2519 East Sunrise Boulevard at the Galleria Mall in Fort Lauderdale.
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