(Adds background on REIT IPOs)
By Ilaina Jonas and Olivia Oran
June 21 Blackstone Group LP is
interviewing investment bankers for a proposed initial public
offering of its neighborhood shopping center company, Brixmor
Property Group Inc, according to two people familiar with the
Several banks will likely be hired, given the size of the
company, which owns more than 600 shopping centers and is valued
at about $13 billion including debt, one source said on Friday.
The shopping centers are typically anchored by supermarkets
Blackstone acquired most of Brixmor's properties in 2011,
when it paid about $9.2 billion for the U.S. real estate owned
by then-struggling shopping center company, Australia-based
Centro Properties Group.
Representatives for Blackstone did not immediately respond
to requests for comment. The sources asked not to be named
because the matter is not public.
As measured by gross leasable retail space, Brixmor is the
largest landlord of TJX Cos Inc, Kroger Co,
supermarket chain Ahold USA, Dollar Tree Inc
and Staples Inc.
With 94 million square feet of gross leasable square feet of
space in 39 states, Brixmor is the second largest owner of
neighborhood shopping centers after Kimco Realty Corp.
Last month Brixmor named longtime Kimco veteran Michael
Pappagallo as president and chief financial officer.
Blackstone has said it planned to take Brixmor public by the
end of the year. It also said it would probably take the larger
Hilton Worldwide public by or about the end of next year, and
begin selling its large portfolio of office buildings - amassed
when it bought Equity Office in 2007, CarrAmerica and part of
Trizec Properties in 2006.
Recently, fears of rising interest rates have pummeled
stocks of commercial real estate investment trusts, whose large
dividends make them attractive in a prolonged low-interest-rate
The benchmark MSCI REIT index has lost more than 15
percent since May 21, just before Federal Reserve Chairman Ben
Bernanke started hinting the Fed could soon begin scaling back
its economic stimulus of monthly bond purchases. Kimco's stock
has lost nearly 14 percent.
Some bankers say they expect a slowdown in public offerings
from REITs due to expectations that interest rates will rise.
Earlier this month, Colony American Homes Inc, a provider of
single family homes for rental, postponed its IPO due to market
(Reporting by Ilaina Jonas and Olivia Oran in New York; Editing
by Jeffrey Benkoe and Kenneth Barry)