- The Company is obtaining a high quality portfolio at an attractive price in an off-market transaction. The portfolio consists of nine high quality centers, a majority of which contain a grocery anchor and are well located within their markets. The Company is acquiring the portfolio in an off-market transaction that it believes is at a significant discount to replacement cost. The Company believes this represents a compelling opportunity for it to acquire high quality real estate consistent with its long term strategy of owning centers in high-growth markets.
- The portfolio will complement the Company’s existing portfolio in terms of asset quality, tenant base and geographic distribution. The portfolio’s nine retail properties are located in four states in the southern United States. Approximately 1.5 million square feet, or approximately 74%, of the portfolio’s owned GLA is located in MSAs (as defined below) in Florida, Georgia and Texas, states in which the Company already has a strong presence and significant operating experience. Expansion in these regions enables the Company to leverage its scalable platform to operate the portfolio assets with minimal increase in general and administrative costs.
- The portfolio presents the Company with a significant value creation opportunity. The portfolio provides the Company with an opportunity to create value and grow its net operating income through lease-up of vacant space, roll-over of below-market rents where applicable and pursuit of redevelopment opportunities where appropriate.
- The portfolio acquisition, and the method by which the Company intends to fund it, will improve the Company’s balance sheet. The portfolio acquisition, and the method by which the Company intends to fund it, are expected to increase the Company’s equity float and reduce its leverage. Furthermore, the addition of the nine portfolio properties to the Company’s existing portfolio will significantly increase the value of the Company’s unencumbered property pool and create additional liquidity and borrowing capacity for the Company.
|Metropolitan||of Leased||Annualized||Per Leased|
|Property||State||Area (MSA)||GLA (1)||GLA (2)||Revenue (3)||GLA (3)(4)||Major Tenants|
|Lakewood||FL||Jacksonville||196,870||83.5%||$1,886,056||$11.48||Winn Dixie, Stein Mart, Chase Bank|
|Northdale||FL||Tampa||176,917||94.3%||$1,901,444||$11.39||TJ Maxx, Beall’s, Sweetbay Supermarket (non-owned)|
|Hunter’s Creek||FL||Orlando||119,729 (5)||96.2%||$1,438,953||$12.49||Publix|
|Burnt Store||FL||Punta Gorda||95,023||75.5%||$644,844||$8.99||Publix, Home Depot (non-owned)|
|Portofino||TX||Houston||372,506||94.6%||$5,969,762||$16.94||Sports Authority, Stein Mart, Michael’s, DSW, Old Navy, Conn’s Appliances, PetSmart|
|Kingwood Commons||TX||Houston||164,366||98.1%||$2,933,179||$18.20||Randall’s, Petco, Chico’s, Talbot’s, The Children’s Place, Jos. A. Bank, Ann Taylor|
|Trussville I & II||AL||Birmingham||446,484||95.4%||$3,998,119||$9.38||Wal-Mart, Regal Cinema, Marshall’s, Petsmart, Sam’s Club (non-owned), Kohl’s (non-owned)|
|Colonial Shoppes at Clay (6)||AL||Birmingham||66,165||94.7%||$786,187||$12.55||Publix|
|Beechwood||GA||Athens||342,217||95.0%||$3,655,434||$11.25||Fresh Market, TJ Maxx, Stein Mart, Georgia Theatre, Body Plex Fitness, Chico’s, Jos. A. Bank, Ann Taylor Loft, Coldwater Creek, Talbot’s|
|(1)||Owned GLA represents gross leasable area that is owned by the Company.|
|(2)||Percentage of Leased Owned GLA reflects Owned GLA leased as of September 30, 2013.|
|(3)||Annualized Base Rent Revenue represents the monthly contractual rent as of January 1, 2014 for each applicable property, multiplied by 12.|
|(4)||Annualized Base Rent Revenue and Annualized Base Rent Per Leased Owned GLA assumes Percentage of Owned GLA Leased as of September 30, 2013. Annualized Base Rent Revenue and Annualized Base Rent per Leased Owned GLA do not include tenant reimbursements.|
|(5)||Excludes 107,806 square feet of currently Owned GLA that is under contract to be sold to a tenant at the property for approximately $3.25 million, which contract will be assumed by the Company.|
|(6)||Publix has a right of first offer to purchase this property that has been triggered as a result of the proposed portfolio acquisition. There can be no assurance that Publix will not exercise this right, in which case the Company would not acquire this property.|