Schorsch REIT to sell shopping center portfolio to Blackstone

$1.975B sale will pay for land under 500 Red Lobster restaurants

By Bruce Kelly

May 21, 2014 @ 12:28 pm (Updated 3:42 pm) EST

Nicholas Schorsch, real estate, Blackstone

American Realty Capital Properties Inc. said Wednesday it intended to pay for its purchase of 500 Red Lobster restaurants by selling most of its multitenant shopping center portfolio to Blackstone Real Estate Partners VII for $1.975 billion in cash.

American Realty Capital Properties, a publicly traded real estate investment trust with the ticker symbol ARCP, said Friday it bought the land on which more than 500 Red Lobster restaurants stand in a $1.5 billion sale-leaseback deal. ARCP invests in net lease real estate, meaning the tenant pays operating expenses of the property such as taxes and utilities. Net lease properties are commonly single-tenant buildings, including restaurant chains such as Red Lobster.

ARCP expects to finalize the sale to the Blackstone fund in the next month. With the acquisition of the $1.5 billion Red Lobster real estate portfolio, ARCP would meet its goal for 2014 of $3 billion in acquisitions. The company is increasing its acquisition goal for the year to $4.5 billion, according to a statement.

“We now believe the sale of the multitenant 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,” nontraded REIT czar Nicholas Schorsch, chief executive and chairman of ARCP, said in a statement.