Blackstone's Brixmor files for real estate IPO

NEW YORK Thu Jul 18, 2013 3:17pm EDT

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NEW YORK (Reuters) - Blackstone Group LP's (BX.N) Brixmor Property Group Inc, owner of neighborhood shopping centers, on Thursday filed with federal regulators for an initial public offering in what will likely be one of the largest real estate IPOs in years.

Brixmor said it was seeking to raise $100 million, but the amount was solely for the purpose of calculating the registration fee, the company said in a filing. The IPO is expected to be larger as Brixmor is valued at roughly $13 billion, including debt.

The IPO would likely come in the fourth quarter, Blackstone President Tony James said in a conference call with journalists following the release of the company's second-quarter financial results.

Investors and analysts have been awaiting the filing, as it is one of Blackstone's largest real estate companies expected to become publicly traded or sold. Real estate is the biggest earner among Blackstone's businesses. Blackstone's strategy is buying properties that are either financially or physically in need of help, fix them and then sell them.

Blackstone, the world's largest private equity and asset management company, acquired nearly all of Brixmor's properties when in 2011 it bought, for $9.2 billion, more than 700 U.S. real estate properties from struggling shopping center company Australia-based Centro Properties Group. It was Blackstone's third-largest real estate investment.

The markets have given their approval of the strip center REITs. Shares have been trading at a premium to the value of the underlying assets, indicating that investors believe there is still move value in the near future.

"That IPO is certainly well anticipated by investors," Green Street Advisors analyst Cedrik Lachance said.

Blackstone previously said that it planned to take Brixmor public by the end of the year. It also has said it would likely take the larger hotel company Hilton Worldwide public by the end of next year. Blackstone could consider other options, including borrowing more to pay dividends or a merger, James said on Thursday. It also has said it would likely sell its massive portfolio of office buildings within the next year or so, maybe in pieces.

Brixmor, a real estate investment trust, owned 522 shopping centers, usually anchored by grocery stores or value-oriented retailers such as T.J. Maxx, according to the filing. The portfolio is 91 percent leased. With 86.7 million square feet of gross leasable space, Brixmor is the second largest owner of neighborhood shopping centers after Kimco Realty Corp (KIM.N).

Brixmor is owned by funds managed by Blackstone. It intends to trade under the ticker BRX on the New York Stock Exchange.

Bank of America Corp (BAC.N), Citigroup Inc (C.N), JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N) have been selected as book runners to underwrite the offering.

(Reporting by Ilaina Jonas; editing by Sofina Mirza-Reid, Chizu Nomiyama and Kenneth Barry)

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