Blackstone Buys 36 U.S. Shopping Centers

Blackstone Group is paying $295.7 million in cash, plus debt, to acquire 36 U.S.-based shopping centers from Equity One Inc. The shopping centers are located chiefly in the southeastern U.S. cities of Tampa, Orlando and Atlanta, and 20 of them are anchored by Publix Super Markets Inc. stores, Reuters wrote. Others are in North Carolina, South Carolina, Alabama and Maryland. Blackstone Real Estate Partners Fund VII will pay a total of $473.1 million, which includes the assumption of $177.4 million in mortgage debt, Reuters wrote. The deal will close in the fourth quarter.

(Reuters) – Equity One Inc. (EQY.N) has agreed to sell 36 U.S. grocery-anchored shopping centers to a Blackstone Group LP (BX.N) fund for $295.7 million plus the assumption of debt, allowing Equity One to focus on primary urban markets and Blackstone to build up its Centro retail property arm.

The three dozen shopping centers are located chiefly in the southeastern U.S. cities of Tampa, Orlando and Atlanta, and 20 of them are anchored by Publix Super Markets Inc stores. Others are in North Carolina, South Carolina, Alabama and Maryland.

Equity One has been refocusing its business on shopping centers in the major U.S. metropolitan markets of New York, Miami, Boston, San Francisco and Los Angeles.

Blackstone Real Estate Partners Fund VII will pay a total of $473.1 million, which includes the assumption of $177.4 million in mortgage debt. The sale is expected to close in the fourth quarter.

Miami-based Equity One said it plans to use the proceeds to retire debt, fund redevelopment, and for future acquisitions and general corporate purposes.

For Blackstone, the deal gathers another 36 properties under its Centro retail umbrella. Blackstone made its entry into the U.S. retail real estate market in a big way earlier this year, acquiring 585 U.S. shopping centers for $9.4 billion from Australia’s Centro Properties.

Blackstone purchased the Centro properties with its $11 billion Real Estate Partners Fund VI. For the proposed deal for the Equity One properties, Centro will manage the Fund VII’s 36 shopping centers. Fund VII raised $4 billion in its first closing and is expected to be as big as its predecessor.

For Equity One, the sale did come at a price, as the real estate investment trust plans to recognize a net impairment loss of $32 million to $36 million in the third quarter on properties. (Editing by Andre Grenon)