ARCP To Sell Multi-Tenant Shopping Center Portfolio For $1.975 Bln - Update

(RTTNews) - American Realty Capital Properties, Inc., (ARCP) Wednesday said it intends to sell substantially all its multi-tenant shopping center portfolio to affiliates of Blackstone Real Estate Partners VII for $1.975 billion in cash.

The company also said it has commenced a public offering of 100 million shares of its common stock, and increased its self-originated acquisitions target for full-year 2014 to $4.5 billion.

American Realty Capital Properties owns and acquires single tenant, freestanding commercial real estate that is net leased on a medium-term basis.

Nicholas Schorsch, executive chairman and chief executive officer of ARCP said, "...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."

ARCP has entered into a letter of intent with Blackstone and expects to finalize definitive documentation related to the sale in the next 30 days.

The company intends to use the proceeds from the sale to fund its recently announced Red Lobster sale-leaseback transaction. According to the firm, the properties included in the portfolio are the same properties ARCP previously announced to spun off into American Realty Capital Centers, Inc.

On March 13, ARCP had announced its plan to spin off substantially all of its multi-tenant shopping center business into a publicly traded REIT, American Realty Capital Centers, Inc., that will operate under the name "ARCenters." ARCenters' portfolio was about 11.8 million total square feet, with properties located in 26 states.

Today, ARCP stated that with the acquisition of the $1.5 billion Red Lobster real estate portfolio through sale-leaseback, ARCP will meet its previously announced acquisition goal for 2014 of $3.0 billion, well ahead of year-end, and has increased its self-originated acquisitions target for the full-year 2014 to $4.5 billion.

Separately, the company said it has commenced a public offering of 100 million shares of its common stock. ARCP expects to grant the underwriters a 30-day option to purchase up to 15 million additional shares of common stock.

The company plans to use the net proceeds of the offering to repay outstanding debt under its existing credit facility and for other general corporate purposes.

ARCP closed Tuesday's regular trading at $12.91 on the Nasdaq. In the pre-market activity on Wednesday, the shares are down 2.25 percent.