Real estate developer Rick Caruso’s Caruso Affiliated has formed a joint venture with private equity firm TPG to buy retail and mixed-use properties along the West Coast, taking advantage of depressed prices.
Caruso Capital Partners LLC, part of Los Angeles-based Caruso Affiliated, and TPG Capital, Fort Worth-based TPG’s buyout group, is investing up to $750 million of debt and equity in Caruso-TPG Partners, with Caruso the operating partner.
Caruso, best known for developing high-end Los Angeles shopping centers such as the Grove, created Caruso Capital to invest in existing retail developments.
Rick Caruso, Caruso Affiliated’s chief executive, will serve as chief executive of the newly formed entity, with Caruso Capital President Stephen Rader serving as president. Caruso Affiliated and TPG will have equal representation on the board of directors, the companies said.
Caruso said that he’d been an approached several times over the years by potential investment partners, and finally this was an opportunity that made sense.
“TPG has an incredible track record,” he said. “Together we think there are going to be some very unique opportunities that the market will present. It is an opportunity to leverage our balance sheet and an opportunity for TPG to get into real estate.”
Caruso-TPG Partners has already been operating for about a month and has “a couple of deals in the works,” he said without elaborating. In addition to purchasing existing developments, the joint venture may also develop new projects.
TPG, which also has U.S. offices in New York and San Francisco, has a long history in retail investment. Over the years, the company has made investments in Neiman Marcus, PETCO, J. Crew and Beringer Wines, among other businesses. TPG Capital recently bought the assets of the collapsed Corus Bank.
“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,” said TPG senior partner Kelvin Davis in a statement.
Note: Staff reporter Daniel Miller contributed to this story.
