NEW YORK (Reuters) - Brixmor Property Group Inc, a shopping center company owned by Blackstone Group LP (BX.N) and Blackstone’s first property company to become publicly traded could raise more $905.6 million in its intitial public offering and value the company at more than $4.7 billion, according to regulatory filing on Thursday.
The move paves the way for Blackstone to bring other real estate companies to the public market.
“It is their first property IPO,” Green Street Advisors analyst Cedrik Lachance said. “When you look at what Blackstone owns, there are many more property companies that could be exited via the public market. So you want this first IPO to have a certain amount of success.”
Brixmor, which first filed for an IPO in July, will be offering 37.5 million shares, at a range of $19 to $21 per share according to a filing with the U.S. Securities and Exchange Commission. Including an overallotment of 5.625 million shares, the IPO at the higher end could raise $905.63 million, valuing the company at $4.73 billion.
Real estate has been the chief driver of Blackstone’s financial success, and Jonathan Gray, global head of real estate is seen as a candidate to succeed Chief Executive Officer Stephen Schwarzman.
In the third quarter, real estate accounted for 64.7 percent of Blackstone’s economic net income (ENI), the company said on Thursday. ENI is a measure of profitability that takes into account the mark-to-market value of its portfolio.
“You can’t look at IPOs for us as exits,” Blackstone President Tony James said during a conference call with journalists. “You can look at it as the appetizer before the meal.”
Blackstone wants the IPO price to be viewed as a bargain in order to entice buyers, enable the stock to trade well and “be viewed favorably because we’re going to be owners for three or four years after that,” James said.
Blackstone has about six of its companies, many of them real estate companies, in various stages of either being sold or in the IPO process.
In addition to Brixmor, it has filed IPO plans for U.S. hotel operators Hilton Worldwide Inc and budget hotel operator Extended Stay America. It may sell or IPO budget hotel chain La Quinta Inns & Suites.
Farther down the road, its warehouse and distribution center company IndCorp Properties and single-family homes for rent company Invitation Homes also could be slated for IPOs.
Brixmor has 522 shopping centers, about 70 percent of which are anchored by supermarkets. The portfolio is 92 percent occupied. The company intends to list on the New York Stock Exchange under the symbol “BRX”.
Bank of America Merrill Lynch, Citigroup, JP Morgan, Wells Fargo Securities and Barclays are among the lead underwriters for the IPO.
Additional reporting by Avik Das in Bangalore; Editing by Sriraj Kalluvila and Leslie Gevirtz