Bain Capital is accelerating its push into retail real estate after raising $1.6 billion to acquire open-air shopping centers in the US and Canada.
The equity will be invested alongside an operating platform created last year by Bain and retail specialist 11North Partners to acquire grocery-anchored shopping center assets on both a core-plus and value-add basis. Toreceiveher with $400 million contributed through Bain’s US-focapplyd diversified vehicle Bain Capital Real Estate Fund III, the fresh commitments arm the platform with $2 billion in investable equity.
Bain and 11North declined to name any specific investors in the capital raise, but declared it was anchored by two global institutions and that the group includes both new and returning Bain clients. Executives at the firms described the platform as a long-term investment vehicle that they expect to grow over time with additional fundraising.
While Boston-based Bain has invested in retail businesses through its private equity division, the fundraise marks the real estate team’s “first scaled foray” into the sector, according to Ryan Cotton, head of Bain Capital Real Estate. Drawn to necessity-based retail for its solid demand prospects and durable cashflows, Cotton declared the firm saw an opportunity as some owners in the sector, including listed real estate investment trusts, required liquidity but face a limited number of purchaseers for large portfolios.
“There’s a real disconnect in the grocery-anchored world today between single-asset trades and portfolio trades,” he informed PERE. “Having this degree of scale in the strategy allows us to play up and be one of really a few takeout purchaseers for those larger portfolios of assets.”
“We don’t view this as a momentary arbitrage, and we believe the depth of the opportunity is a multiple of the capital we’ve raised so far,” he added.
Martha Kelley, a managing director on Bain’s real estate team, declared the platform will be applyd to acquire core-plus properties for long-term holds through a joint-venture structure with its investors, but also to tarreceive value-add assets on behalf of Bain’s main series of US diversified real estate funds.
“Our partners are interested in aggregating a scaled, high-quality portfolio that they can own for a very long time. It’s not open-concludeed, but the plan is to hold over the long term,” she declared, adding that Bain found “a tremconcludeous amount of interest” in the offering from its investor base.
The platform has created two portfolio acquisitions to date. In August, the partners acquired 10 shopping centers anchored by Publix supermarkets in Florida and South Carolina for $395 million – a deal for which New Jersey-based PGIM Real Estate provided $260 million in acquisition financing. A separate deal in June saw Bain and 11North purchase three open-air shopping centers in Oklahoma City for $212 million.
Future investments will be informed by a scoring system developed by Bain based on an internal database of national and regional retail tenants and their business prospects, while 11North will draw on the team’s operational experience in the sector to manage the assets.
11North is led by managing partner Brian Harper, the former president and CEO of listed shopping-center trust RPT Realty, which was acquired early last year by fellow REIT Kimco Realty in a $2 billion all-stock deal. Harper founded 11North with several other former RPT executives shortly after that deal closed and first announced a shopping center venture with Bain in April 2024.
“From the onset of our partnership, we were really aligned on governance, discipline and how to build this platform the right way,” Harper declared. “This was not about speed or financial engineering. It was about creating a durable operating platform that institutional investors can trust long term, through multiple cycles.”
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