American Realty Capital Properties Inc. agreed to buy 471 properties mainly used by restaurants from General Electric Co. for $807 million to diversify its holdings.
The buildings are mostly rented out to tenants who operate national food chains including IHOP, Jack in the Box, Burger King and Taco Bell, New York-based American Realty said in a statement today. The deal means the company has reached its target of $1.1 billion in acquisitions five months earlier than planned, American Realty said.
“This portfolio acquisition underscores our ability to identify and purchase a diversified pool of assets anchored by brand-name tenants paying rents which are accretive to our earnings,” American Realty President Mike Weil said in the statement.
American Realty, led by Chief Executive Officer Nicholas Schorsch, is expanding its portfolio of single-tenant buildings and expects to own more than 1,200 properties following the completion of recently announced transactions. The real estate investment trust said earlier this week that it agreed to buy CapLease Inc. in a deal valued at $2.2 billion, including debt. CapLease owns real estate across the U.S. ranging from single-tenant office buildings to distribution centers.
The assets purchased from GE’s GE Capital finance unit consist of net-lease properties, in which the tenant is responsible for the costs relating to the property as well as the rent. The average lease on the buildings is nine years and occupancy is close to 100 percent, American Realty said.
GE Chief Executive Officer Jeffrey Immelt has been working to exit some businesses tied to real estate as he pares GE Capital’s balance sheet after $32 billion of credit losses during the financial crisis.
GE Capital earlier this month sold 79 factories and office buildings in Toronto, representing all of its real estate in the city. GE also sold seven Australian office properties this month to Sydney-based Mirvac Group, and in July agreed to sell its Business Property Lending Inc. unit to EverBank Financial Corp. for $2.51 billion in cash.