New York City — Two New York City-based firms, retail owner-operator Brixmor Property Group and Everview Partners, a private equity and investment management group, have entered into an agreement to acquire Toronto-based Slate Grocery REIT for approximately $2.3 billion.
Under the terms of the transaction, Brixmor will acquire a portfolio of 23 grocery-anchored shopping centers totaling roughly 3 million square feet for $636 million.
The newly formed joint venture between Brixmor and affiliates of Everview Partners will acquire Slate Grocery’s remaining 92 properties totaling approximately 12 million square feet for approximately $1.7 billion.
The shopping center portfolio that comprises Brixmor’s lone ownership piece of the transaction is concentrated predominantly across Florida, Georgia and the Carolinas. Those properties currently have an aggregate occupancy rate of about 96 percent and are anchored by grocers such as Publix, Kroger and Harris Teeter.
Brixmor will take full ownership of 22 of the centers and 50 percent ownership of a single center. Additionally, Brixmor has identified approximately $100 million of redevelopment and outparcel development opportunities within those centers, including several potential Publix redevelopment projects.
Within the second component of the transaction, Brixmor will hold a 20 percent common equity interest and Everview will hold an 80 percent common equity interest in the 92 shopping centers. Brixmor will also assume the roles of asset manager, property manager and leasing representative for those properties.
Additionally, a wholly owned subsidiary of the Abu Dhabi Investment Authority will act as a strategic investor alongside Everview in the transaction. The deal is expected to close in the first quarter of next year.
“Across both the wholly owned and joint venture assets, we see meaningful embedded value through below-market rents and a robust pipeline of remerchandising, redevelopment and outparcel opportunities,” says Brian Finnegan, Brixmor’s CEO and president. “We believe our extensive retailer relationships and proven execution capabilities will position us to unlock that value and generate meaningful cash flow growth over time.”
Brixmor’s national portfolio currently spans 346 retail centers totaling some 63 million square feet. The company’s stock price opened at $28.15 per share on Monday, Sept. 28, the day the transaction was announced, relatively unchanged from $27.50 per share a year ago.
— Abby Cox