By Ilaina Jonas
NEW YORK, July 18 Blackstone Group LP's
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
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.
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, Citigroup Inc, JPMorgan
Chase & Co and Wells Fargo & Co have been
selected as book runners to underwrite the offering.