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ARCP sells shopping center portfolio for $1.975B

American Realty Capital Properties announced today that it intends to sell substantially all its multi-tenant shopping center portfolio for $1.975 billion in cash to affiliates of Blackstone Real Estate Partners VII.

ARCP has entered into a letter of intent to sell the portfolio to Blackstone and expects to finalize the sale in the next 30 days.

The company said it will use the proceeds from this sale to fund its recently announced Red Lobster sale-leaseback transaction.

The Red Lobster in Times Square
The Red Lobster in Times Square

The properties included in this portfolio are the same properties ARCP previously announced would be spun off into American Realty Capital Centers, Inc.

As announced last week, with the acquisition of the $1.5 billion Red Lobster real estate portfolio via sale-leaseback, ARCP would meet its previously announced acquisition goal for 2014 of $3.0 billion, well ahead of year-end. As a result, the company is increasing its self-originated acquisitions target for the full-year 2014 to $4.5 billion.

Nicholas S. Schorsch, executive chairman and chief executive officer of ARCP, noted, “The previously announced spin-off of our multi-tenant portfolio created visibility and optionality for ARCP in connection with its multi-tenant assets. Thus, we were able to explore various avenues to create stockholder value during the time we prepared for the spin-off. We 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.”

David S. Kay, president of ARCP, added, “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. 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 than100 basis points lower than the 7.9% cash cap rate for the Red Lobster portfolio.”

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