B
lackstone is acquiring a group of retail buildings in Soho, including properties leased to Patagonia and Amiri, for approximately $200 million. This deal marks the largest Manhattan retail purchase by an investor in over three years, signaling a resurgence in interest in the once-maligned asset class. The private equity firm is buying four buildings from ASB Real Estate Investments, which acquired them for $204 million between 2012 and 2016.

    Some of the current leases are below market rates, and Blackstone aims to increase revenue by bringing these spaces up to today's levels. This move reflects a return to normal investing practices that disappeared after the retail bubble burst in 2016. The market has since corrected, with leasing and rents improving over the years, attracting renewed demand from property investors.

    The portfolio includes office space above the retail, with more than half of the square footage dedicated to office use. ASB CEO Robert Bellinger stated that the sale aligns with the company's strategy to focus on industrial, apartment, and self-storage sectors, which are expected to offer stronger risk-adjusted returns. The deal is the largest retail purchase made by an investor since 2021.

    Blackstone's acquisition includes 61 Crosby Street, 72-76 Greene Street (co-owned with L3 Capital), 465 Broadway (co-owned with Centurion Realty), and 415 West Broadway. ASB Real Estate bought these properties through its open-ended ASB Allegiance Fund, which invests in core properties. The company plans to sell off more than $1 billion worth of real estate, including 24 assets valued at $1.4 billion.

    Retail in Soho is experiencing a resurgence, with a "flurry of leases" along the Broadway corridor driving down availability and increasing rents by 35% year over year to $679 per square foot. Average pricing on the corridor has risen above $600 per square foot for the first time since 2017.