The Public Sector Pension Investment Board, one of Canada’s largest pension investors, and Nuveen Real Estate have launched a joint venture with an initial $790 million invested in open-air shopping centers in the U.S., concentrating on centers anchored by market-dominant grocers, necessity-based retailers and essential services.
The strategy is demographically driven, targeting metro areas with strong population growth, rising household incomes and high barriers to entry, where well-capitalized retailers are actively seeking to expand. To date, the venture has closed on 3 million square feet spanning 19 assets in Virginia, Arizona, Florida, Minnesota, Texas, California, Colorado and Washington.
“We have been reshaping our U.S. retail exposure around a much tighter definition of the sector: open-air centers anchored by grocers and daily-needs tenants, which aims to deliver a steady, inflation-linked income for our portfolio,” said Julien Roy-Décary, managing director of real estate investments, Americas, at PSP Investments.
Notable acquisitions include:
- The Shoppes of Lorton Valley, a 110,000-square-foot neighborhood center in Lorton, Virginia, anchored by Giant, and
- Las Tiendas Village in Chandler, Arizona, a 188,000-square-foot center in the Phoenix metro anchored by Sprouts Farmers Market.
The venture also has completed two portfolio acquisitions: six centers totaling about 801,000 square feet in markets including Fort Lauderdale, San Diego, Orange County, Dallas-Fort Worth, Minneapolis and Los Angeles, and an 11-property, 1.9 million-square-foot portfolio in California, Colorado and Washington. All assets sit at high-traffic intersections or along major corridors serving daily-needs shoppers, the companies said in a joint news release.
“Necessity-based retail has demonstrated remarkable resilience through various cycles, underpinned by consistent consumer demand for essential goods and services,” said Brian Wallick, portfolio manager for retail at Nuveen Real Estate. “This venture is designed to deliver both durable income and long-term value creation.”
PSP Investments manages $320.6 billion in net assets for Canadian federal pension plans. Nuveen Real Estate, owned by TIAA, manages $135 billion in real estate assets. The venture plans continued growth.
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