Boston, MA 06/17/2014 (wallstreetpr) – American Realty Capital properties Inc (NASDAQ:ARCP) plans to sell as many as 76 shopping centers to a joint venture of an affiliate of Blackstone Real Estate Partners VII and DDR Corp.
The joint venture has entered into a sale and purchase agreement to buy the portfolio in a deal worth $1.975 billion, which includes a $461 million assumption and new financings of the remaining amount valued at around $800 million. It is formed with a 95% ownership of the common equity by Blackstone and the remaining 5% by a DDR affiliate. DDR is also seeking to invest up to $300 million in preferred equity with a fixed dividend rate of 8.5%. It has additionally agreed to provide regular leasing and management services. It will also have the right of first to obtain 10 assets as per specific terms in accordance with previous deals.
The acquisition is expected to be completed by the third quarter of the year. The non- prime asset sales of the portfolio are anticipated to start soon after the completion of the acquisition procedure when the portfolio management is activated within the joint venture.
The 16.4 million sq. ft. portfolio encompasses shopping centers in the location Denver, Houston, Los Angeles and several other important hubs. These centers are occupied by big names involving retailers like Whole Foods Market, Inc. (NASDAQ:WFM), Wal-Mart Stores, Inc. (NYSE:WMT), The Fresh Market Inc (NASDAQ:TFM) and so on.
American Realty Capital properties Inc (NASDAQ:ARCP)’s President, David Kay, said that the company seeks to use the capital it will get from the sale of the Red Lobster deal as well as its scheme of obtaining single tenant commercial areas. ARCP is acquiring Red Lobster’s property from its current owner Golden Gate Capital LP for a deal worth $1.5 billion. The company aims to set the acquired real estate back for lease.