American Realty Capital Properties Inc. plans to spin off most of its multitenant shopping-center business into a publicly traded real estate investment trust valued at more than $2.2 billion.
The REIT will be known as American Realty Capital Centers and will initially own 69 shopping centers, the New York-based company said today in a statement. American Realty Capital Properties will own 25 percent of the new company.
American Realty Chief Executive Officer Nicholas Schorsch last year announced acquisitions that would triple the company’s portfolio of single tenant, or net-lease, buildings. Last month the company completed the purchase of Cole Real Estate Investments Inc. for about $6.85 billion.
The separation of American Realty’s single-tenant and multiple-tenant properties will “create more clarity, more efficiency and more opportunity for our stockholders,” Schorsch said in the statement. He will serve as chairman of the new REIT, which will operate as ARCenters.
Investors will receive one share of the new company for every 10 American Realty shares they own, according to the statement. The new business is expected to generate more than $139 million in net operating income in 2014.
American Realty shares rose 2.8 percent in the 12 months through yesterday. They climbed 13 percent this year.
Shopping-center landlords have trailed gains in the REIT market this year. The Bloomberg shopping-center index rose 6.9 percent this year through yesterday, compared with an 8.5 percent increase for the broader Bloomberg REIT index.
Simon Property Group Inc., the largest U.S. REIT, plans to spin off its strip shopping centers and smaller enclosed malls in a new publicly traded company, Washington Prime Group Inc. Simon, based in Indianapolis, is focused on redeveloping its top regional malls, opening outlet centers and investing overseas to boost growth.