Tags: Blackstone | American Realty | REIT | shopping-center

American Realty to Sell Shopping-Center Assets to Blackstone

Wednesday, 21 May 2014 09:36 AM

American Realty Capital Properties Inc., the largest U.S. owner of single-tenant real estate, plans to sell most of its multitenant shopping-center buildings to affiliates of Blackstone Group LP for $1.98 billion in cash.

American Realty expects to complete the deal within 30 days and use the proceeds to fund its purchase of Red Lobster’s real estate portfolio, the company said today in a statement. The New York-based real estate investment trust raised its full-year target for acquisitions to $4.5 billion.

American Realty, led by Chief Executive Officer Nicholas Schorsch, has amassed single-tenant buildings leased to businesses such as drugstores and fast-food restaurants through acquisitions, including the $9.85 billion takeover of Cole Real Estate Investments Inc. in February. Last week, the REIT said it would buy more than 500 Red Lobster seafood restaurants in a $1.5 billion sale-and-leaseback deal.

“This sale will allow us to acquire what in our view are the 500 best Red Lobster stores profitably by selling our multitenant portfolio” at a yield that is more than 1 percent lower than the restaurants’ 7.9 percent initial cash return, David Kay, American Realty’s president, said in the statement.

American Realty had previously planned to spin off the properties being sold to New York-based Blackstone into a unit called American Realty Capital Centers. Separating into separate single-tenant and multitenant retail companies would provide stockholders with “more clarity, more efficiency and more opportunity,” Schorsch said in March.

‘Best Value’

“We now believe the sale of the multitenant portfolio will deliver the best value-creation option to our shareholders and serve to enhance the clarity of our single-tenant, net lease investment strategy,” Schorsch said in today’s statement.

Blackstone, the world’s biggest manager of private-equity real estate funds, has retail holdings including a majority stake in Brixmor Property Group Inc. The New York-based REIT, which owns grocery-anchored shopping centers, raised $825 million in an October initial public offering.

In December, Blackstone bought a $718 million minority stake in Columbia, South Carolina-based Edens, an owner of more than 100 community-based shopping centers on the East Coast.

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American Realty Capital Properties Inc., the largest U.S. owner of single-tenant real estate, plans to sell most of its multitenant shopping-center buildings to affiliates of Blackstone Group LP for $1.98 billion in cash.
Blackstone, American Realty, REIT, shopping-center
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2014-36-21
Wednesday, 21 May 2014 09:36 AM
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