{"id":1004097039,"date":"2014-05-22T06:06:03","date_gmt":"2014-05-22T14:06:03","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004097039"},"modified":"2022-12-07T21:48:48","modified_gmt":"2022-12-08T05:48:48","slug":"arc-to-sell-multi-tenant-shopping-center-portfolio-to-blackstone","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/arc-to-sell-multi-tenant-shopping-center-portfolio-to-blackstone\/","title":{"rendered":"ARC to Sell Multi-Tenant Shopping Center Portfolio to Blackstone"},"content":{"rendered":"<p><i>By Gail Kalinoski, Contributing Editor<\/i><\/p>\n<div id=\"attachment_100409\" style=\"width: 160px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/05\/DavidKay.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-100409\" data-attachment-id=\"1004097044\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/arc-to-sell-multi-tenant-shopping-center-portfolio-to-blackstone\/davidkay\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/05\/DavidKay.jpg\" data-orig-size=\"179,160\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"DavidKay\" data-image-description=\"\" data-image-caption=\"\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/05\/DavidKay.jpg?w=179\" class=\"size-thumbnail wp-image-1004097044\" alt=\"DavidKay\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/05\/DavidKay.jpg\" width=\"150\" height=\"150\" \/><\/a><p id=\"caption-attachment-100409\" class=\"wp-caption-text\">David Kay, ARCP<\/p><\/div>\n<p>Looking to pay the bill for the Red Lobster sale-leaseback deal, American Realty Capital Properties said it intends to sell most of its multi-tenant shopping center portfolio to a Blackstone fund for $1.98 billion in cash.<\/p>\n<p>ARCP had announced two months ago it was going to spin off the portfolio into a publicly traded REIT valued at $2.2 billion so it could focus on its single-tenant, net-lease business. But those plans changed <a href=\"https:\/\/www.commercialsearch.com\/news\/property-types\/arcp-to-grab-red-lobster-re-in-1-5b-sale-leaseback\/1004096732.html\">last week when the REIT said it would buy more than 500 Red Lobster restaurant properties for $1.5 billion and lease them back to Golden Gate Capital, which is acquiring the chain from Darden Restaurants, Inc.<\/a><\/p>\n<p>\u201cThis sale will allow us to acquire what in our view are the 500 best Red Lobster stores profitably by selling our multi-tenant portfolio at a cap rate that is more than 100 basis points lower than the 7.9 percent cash cap rate for the Red Lobster portfolio,\u201d David Kay, ARCP president, said in a news release.<\/p>\n<p>ARCP said Wednesday it had entered into a letter of intent to sell the multi-tenant shopping center portfolio to affiliates of Blackstone Real Estate Partners VII and expected to finalize the deal within 30 days. The net lease REIT would then use the proceeds to fund the Red Lobster sale-leaseback transaction.<\/p>\n<p>The properties in the Blackstone deal are the same <a href=\"https:\/\/www.commercialsearch.com\/news\/property-types\/retail\/arcp-to-spin-off-2b-in-multi-tenant-shopping-centers\/1004092676.html\">assets ARCP had previously announced would be spun off into American Realty Capital Centers, Inc. ARCenters was planning on starting off with 69 multi-tenant properties in an 11.8 million-square-foot portfolio<\/a>. Most of the properties are power centers, grocery-anchored neighborhood centers and anchored community centers that were acquired in the recent $11.2 billion merger with Cole Real Estate Investments, Inc.<\/p>\n<p>Nicholas Schorsch, executive chairman &amp; CEO of ARCP, said in the news release that the planned spin-off had \u201ccreated visibility and optionality for ARCP in connection with its multi-tenant assets\u201d and that it had explored ways to create stockholder value during preparation for the spin-off.<\/p>\n<p>\u201cWe now believe the sale of the multi-tenant 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, further simplifying and rationalizing our business plan,\u201d Schorsch said.<\/p>\n<p>Daniel Donlan, an analyst with Ladenburg Thalmann, wrote in an investors\u2019 note Tuesday, one day before the ARCP announcement about the Blackstone deal, that pursuing a sale of ARCenters instead of spinning it off was a good option to fund the Red Lobster transaction.<\/p>\n<p>\u201cBased on our conversations with investors, the overwhelming majority would prefer a sale of ARCM (ARCenters) vs. a spin-off, which we believe has been repeatedly articulated to management,\u201d Donlan wrote.<\/p>\n<p>Brad Thomas, editor of The Intelligent REIT Investor, said ARCP, \u201cwasted time and energy on the spin-off\u201d then management changed their minds.<\/p>\n<p>\u201cManagement seemed a little bit unpredictable and people like predictability, especially in net lease,\u201d he told <i>Commercial Property Executive<\/i>.<\/p>\n<p>Thomas said Blackstone could leverage up the portfolio or roll the ARCenters assets into Brixmor Property Group, the company it formed in 2011 after it bought nearly 600 shopping centers from Australian-based Centro Property Group. Although Brixmor raised about $825 million in an IPO in late October, Blackstone, a New York-based private equity firm, still owns about 73 percent of Brixmor, according to Bloomberg News. Brixmor now owns 522 shopping centers, mostly neighborhood and grocery-anchored assets, in the United States.<\/p>\n<p>Also on Wednesday, ARCP announced a public offering of 120 million shares of its common stock at $12 per share. It intends to use the proceeds to pay outstanding debt and for other corporate purposes. BofA Merrill Lynch, Citigroup, Barclays, J.P. Morgan, Capital One Securities, Credit Suisse, Deutsche Bank Securities and Wells Fargo Securities are joint bookrunners for the offering.<\/p>\n<p>ARCP also said the planned sale-leaseback acquisition of the Red Lobster real estate portfolio would meet its previously announced goal of $3 billion in acquisitions for 2014, so it is increasing its target for the full year to $4.5 billion in acquisitions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Looking to pay the bill for the Red Lobster sale-leaseback deal, American Realty Capital Properties said it intends to sell most of its multi-tenant shopping center portfolio to a Blackstone fund for $2 billion in cash.<\/p>\n","protected":false},"author":1068,"featured_media":1004097044,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21742,21749],"tags":[],"class_list":["post-1004097039","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-latest","category-retail"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - 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