PSP Investments and Nuveen Launch US$790 Million Joint Venture for Grocery-Anchored Retail Centers

The Public Sector Pension Investment Board (PSP Investments) and Nuveen Real Estate announced Oct. 21 the launch of a joint venture with an initial investment of US$790 million to acquire open-air shopping centers across the United States. The two firms have closed on 19 properties totaling 3 million square feet in Virginia, Arizona, Florida, Minnesota, Texas, California, Colorado and Washington.

The venture's strategy centers on open-air shopping centers anchored by market- or category-dominant grocers, necessity-based retailers and essential services. The firms said the strategy targets U.S. metro areas with strong population growth, rising household incomes and high barriers to entry, where well-capitalized retailers are seeking to expand.

PSP Investments and Nuveen Joint Venture Strategy

The joint venture is demographically driven, according to the announcement, and focuses on centers that continue to show durable performance and resilient foot traffic. PSP Investments, one of Canada's largest pension investors, provides long-term capital, while Nuveen Real Estate brings sourcing and operating capabilities.

Julien Roy-Décary, Managing Director, Real Estate Investments, Americas at PSP Investments, said the pension investor has been reshaping its U.S. retail exposure around a tighter definition of the sector.

"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," Roy-Décary said. "Nuveen brings the sourcing reach and operating depth this kind of portfolio demands, and what we own today is exactly the retail exposure our strategy calls for."

Brian Wallick, Portfolio Manager, Retail, at Nuveen Real Estate, said necessity-based retail has demonstrated resilience through various cycles.

"Necessity-based retail has demonstrated remarkable resilience through various cycles, underpinned by consistent consumer demand for essential goods and services," Wallick said. "Coupled with PSP Investments' long-term capital, this venture is designed to deliver both durable income and long-term value creation. We're confident this combination of scale, relationships, and local execution positions us strongly in one of the most stable and defensive segments of retail real estate."

Acquired Grocery-Anchored Shopping Centers

Two individual acquisitions were named in the announcement:

• The Shoppes of Lorton Valley is a 110,000-square-foot grocery-anchored neighborhood center in Lorton, Virginia, a Washington, D.C. suburb. It is anchored by Giant, a grocery chain with a strong presence in the Washington, D.C. area.
• Las Tiendas Village is a 188,000-square-foot community shopping center in Chandler, Arizona, within the Phoenix-Mesa-Chandler metro area. It is anchored by Sprouts, a specialty organic grocery chain, and complemented by high-credit retailers.

Together, the two named centers total 298,000 square feet, or roughly 10% of the venture's 3 million-square-foot portfolio.

Portfolio Acquisitions Add Scale and Diversification

The joint venture also completed two larger portfolio acquisitions that add scale and geographic diversification while maintaining the grocery-anchored, necessity-based focus.

• The first portfolio consists of six open-air shopping centers totaling approximately 801,000 square feet across Fort Lauderdale, San Diego, Orange County, Dallas-Fort Worth, Minneapolis and Los Angeles.
• The second is an 11-property portfolio totaling approximately 1.9 million square feet across California, Colorado and Washington.

The firms said all assets in the portfolios are positioned at high-traffic intersections or along major corridors, providing visibility and convenient access for daily-needs shoppers. Based on the US$790 million investment and 3 million square feet acquired, the implied investment basis is approximately US$263 per square foot, an indicative portfolio-level figure rather than a property-level price allocation.

Market Context for Grocery-Anchored Retail

The venture arrives as grocery-anchored retail has drawn institutional capital amid tight vacancy. Grocery-anchored vacancy stood at approximately 3.5% entering 2026, compared with a broader retail availability rate of 4.9% in the first quarter of 2026. Grocery-anchored centers are at or near full occupancy in many major markets.

Pricing for high-quality grocery-anchored centers has stabilized in the mid-6% cap rate range in 2026. A year-end 2025 estimate put the national grocery-anchored average at approximately 6.7%, with a wide spread by anchor quality: roughly 5.5% to 5.8% for stronger operators such as Publix and Trader Joe's, versus more than 7.1% for discount-tier anchors.

Transaction liquidity has also improved. Grocery-anchored retail transaction volume reached nearly US$11 billion in 2025, up 42%, with institutional buyers accounting for approximately 27% of volume.

The strategy carries risks typical of private real estate. The firms noted that real estate investments are subject to market, tenant, liquidity and valuation risks, and that income and capital growth are not guaranteed. Tenant concentration, grocery-anchor competition, rent affordability and interest rates are additional factors for the segment.

About the Firms

PSP Investments manages $320.6 billion of net assets as of March 31, 2026, across capital markets, private equity, real estate, infrastructure, natural resources and credit. Established in 1999, it invests amounts transferred by the Government of Canada for the pension plans of the federal Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force. It is headquartered in Ottawa, with its principal business office in Montréal and offices in New York, London and Hong Kong.

Nuveen Real Estate manages $135 billion of assets across public and private investments, spanning debt and equity. The firm has more than 590 dedicated employees located across more than 30 cities in the United States, Europe and Asia Pacific, and is owned by Teachers Insurance and Annuity Association of America (TIAA).

Sources

• Nuveen: PSP Investments and Nuveen Real Estate Launch Joint Venture