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Retail Properties Of America, Inc. Announces Strategic Transactions And Capital Markets Activity For The Fourth Quarter 2012

Retail Properties of America, Inc. (NYSE: RPAI) announced today the sale of $258.0 million of non-core and non-strategic assets during the fourth quarter 2012. For the full year 2012, the Company reached its stated asset disposition objective, disposing of $492.2 million of non-core and non-strategic properties, including the pro-rata share of joint venture properties. In addition, during the fourth quarter 2012, RPAI completed its inaugural preferred equity offering, with the sale of $135 million of 7% Series A Cumulative Redeemable Preferred Stock.

Fourth Quarter Disposition Activity

Asset dispositions during the fourth quarter 2012 included the sale of two non-core office assets for $153.5 million, eight single-tenant retail assets for $67.7 million, and two non-strategic retail assets for $36.8 million. Proceeds from the sales were used to repay mortgage debt and accrued interest of $117.7 million, resulting in net proceeds, before transaction expenses, of $140.3 million in the fourth quarter 2012.

“We are pleased to announce the successful execution of our stated 2012 strategic objective of $450 to $550 million of non-core and non-strategic asset dispositions,” comments Shane Garrison, executive vice president, chief operating officer and chief investment officer. “Through these dispositions, we have further streamlined our high quality portfolio and continued to strengthen our balance sheet. We have now sold 18 of the 23 former Mervyns properties for $134.3 million and expect the remaining properties to close in the first half of 2013.”

Fourth Quarter Capital Markets Transactions

On December 20, 2012, the Company closed on its first preferred equity offering, with the issuance of 5,400,000 shares of 7% Series A Cumulative Redeemable Preferred Stock at $25 per share, resulting in proceeds of $130.7 million, net of underwriters discount. The Company intends to use the net proceeds from the issuance to repay outstanding borrowings under two mezzanine loans, scheduled to mature on December 1, 2019, with outstanding principal balances as of December 31, 2012 of $85.0 million and $40.0 million and fixed interest rates of 12.24% and 14.00%, respectively. The mezzanine loans can be prepaid beginning February 1, 2013 for a prepayment fee of 5.00%.

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