NEW YORK Brixmor Property Group, Blackstone Group LP's (BX.N) neighborhood shopping center business, on Monday said it named Michael Pappagallo, the former chief operating officer of rival Kimco Realty Corp (KIM.N), as its president and chief financial officer, potentially setting the company up for an initial public offering.
The position will become effective May 20.
Pappagallo, who also served as the chief financial officer at Kimco, will play an integral role in executing Brixmor's long-term business and capital markets strategies, the company said in a statement.
In addition, he will lead the company's finance and accounting teams, and have some oversight of its property operations, information technology, acquisitions, dispositions and investor relations efforts.
The public market currently values these types of shopping centers, which are typically anchored by grocers, 15 percent higher than the private markets, Green Street Advisors analyst Cedrik Lachance said.
"The odds of a public exit down the road are certainly higher now than they've been for some time," he said. "The hiring of someone with clear, long-term public market experience at a large competitor of Brixmor gives further weight to that public market strategy."
Blackstone also could sell the portfolio to another publicly traded company, said a real estate executive who was not authorized to speak on the record. Finding a strategic partner to buy the portfolio would eliminate investment banking underwriting fees. Shares would not incur an IPO discount and their sale would not be subject to a lock up term.
"Ultimately, it really depends on the horizon that Blackstone has on realizing market conditions and Blackstone's own time horizon in terms of realizing their investment," Lachance said.
A Blackstone spokesperson declined comment.
The company, born out of Blackstone's 2011 acquisition of Australian-owned Centro Properties' U.S. properties, has a portfolio of more than 600 U.S. properties, located in 39 states.
Meanwhile, Kimco said it named Conor Flynn, the son of Michael Flynn who has served Kimco's strategic adviser, as executive vice president and chief operating officer, according to a filing with the U.S. Securities and Exchange Commission.
(The story corrects former title of Michael Pappagallo to COO of Kimco in first paragraph)
(Reporting by Ilaina Jonas; Editing by Bob Burgdorfer)