EXCLUSIVE-Blackstone interviewing banks for Brixmor IPO -sources

Fri Jun 21, 2013 9:32pm IST

Stocks

   

(Adds background on REIT IPOs)

By Ilaina Jonas and Olivia Oran

June 21 (Reuters) - 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 process.

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 or discounters.

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 environment.

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 conditions. (Reporting by Ilaina Jonas and Olivia Oran in New York; Editing by Jeffrey Benkoe and Kenneth Barry)

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