NEW YORK — American Realty Capital Properties Inc. (NASDAQ: ARCP) intends to sell its multi-tenant shopping center portfolio for approximately $2 billion in cash to affiliates of Blackstone Real Estate Partners VII. ARCP plans to use the capital from its multi-tenant business to fund the purchase of a previously announced Red Lobster portfolio.
ARCP has entered into a letter of intent to sell its multi-tenant shopping center portfolio to Blackstone and expects to finalize definitive documentation with Blackstone with respect to the sale in the next 30 days.
The New-York based REIT would then use the proceeds from the sale to fund its Red Lobster sale-leaseback transaction. The properties included in this portfolio are the same properties that ARCP previously announced would be spun off into American Realty Capital Centers Inc.
“We continued to look at options to create stockholder value through a disposition of our multi-tenant assets, and we believe that through the sale to Blackstone of the multi-tenant shopping center portfolio, we have accomplished this,” says David Kay, president of ARCP.
“This 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.”
With the acquisition of the $1.5 billion Red Lobster deal, ARCP would meet its acquisition goal for 2014 of $3 billion. As a result, the company is increasing its self-originated acquisitions target for the full-year 2014 to $4.5 billion.
The sale is subject to the execution of definitive documentation, which will contain customary closing conditions. The purchase of Red Lobster is also subject to certain closing conditions.
ARCP’s stock price closed Tuesday at $12.90 per share, down from $17.81 per share at this time last year.
— Danielle Everson