TPG, Caruso Form JV to Invest $750M in Retail, Mixed-Use Properties

TPG Capital and Caruso Capital Partners, LLC, an affiliate of Caruso Affiliated, have formed a joint venture to invest as much as $750 million of debt and equity in opportunistic investments. They are eyeing retail centers as well as mixed-use properties in select western U.S. markets.

April 27, 2010
By Allison Landa, News Editor

Courtesy Flickr Creative Commons user citta-vita

TPG Capital and Caruso Capital Partners L.L.C., an affiliate of Caruso Affiliated, have formed a joint venture to invest as much as $750 million of debt and equity in opportunistic investments. They are eyeing retail centers as well as mixed-use properties in select western U.S. markets.

Caruso Affiliated President and CEO Rick Caruso called the joint venture “a powerhouse combination of capital experience unlike any other in the market to acquire and reposition underperforming properties” when announcing the news. Caruso will serve as CEO of the newly formed entity, Caruso-TPG Partners, while Caruso Capital President Stephen Rader will serve as President. Caruso and TPG will have equal representation on the Board of Directors.

The company plans to enter what is fast becoming a major market: acquiring and repositioning underperforming properties. Caruso said in a statement that TPG was an “ideal partner”, bringing global investment experience and real estate background to offer a competitive advantage in securing major property opportunities in the depressed market.

TPG senior partner Kelvin Davis said when announcing the news: “This is a unique opportunity to partner with one of the most successful owners, developers, and operators of retail and mixed-use real estate in the United States.”

The senior partners of TPG have experience in real estate investing and distressed-asset turnarounds dating back 20 years. In October 2009, TPG acquired a $4.5 billion portfolio of construction development loans and real estate owned assets formerly owned by Corus Bank, NA. The deal was done in partnership with the FDIC and a group of investors.

Caruso Capital is a vehicle for acquisitions as well as pursuing development and other market opportunities in the retail and mixed-use property sphere. Its parent company, Caruso Affiliated, has 20 years of experience in the retail real estate industry. Caruso Affiliated’s portfolio includes The Grove in Los Angeles, The Lakes at Thousand Oaks and The Commons at Calabasas.

TPG Capital is the global buyout group of TPG, a private investment firm founded in 1992 with approximately $48 billion of assets under management. TPG has offices in San Francisco, London, Hong Kong, New York, Fort Worth, Melbourne, Moscow, Mumbai, Paris, Luxembourg, Beijing, Shanghai, Singapore and Tokyo.