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March 13, 2014
06:08 EDTARCPAmerican Realty plans to spin off multi-tenant shopping center business
American Realty Capital Properties announced a plan to spin off substantially all of its multi-tenant shopping center business into a publicly traded REIT, American Realty Capital Centers, that will operate under the name "ARCenters" and that is expected to trade on The NASDAQ Global Market under the symbol, "ARCM." ARCP's operating partnership will retain 25% of ARCM. David S. Kay, ARCP's president, stated, "In addition to unlocking that value for our stockholders, we believe this transaction enhances our financial profile while focusing our pure-play strategy. Not only do we have the added benefit of participating in future potential upside through our operating partnership's 25% retained ownership, we will also reduce our leverage to an expected 7.0x net debt to EBITDA while producing an expected combined 7.3% increase in dividend rate and expected AFFO accretion resulting in a combined $1.20 of AFFO per share. Equally noteworthy is the expected improvement in our credit profile as ARCP will maintain a long lease duration while increasing our percentage of investment grade tenancy to 52%, increasing our percentage of unencumbered NOI, decreasing our percentage of secured debt and materially reducing our property-related capital expenditures." Lisa Beeson, ARCP's COO, further stated, "We believe we have the proven expertise to bring ARCenters to the market and to manage ARCM's over $2B of assets alongside the additional $1.2B of shopping center assets managed across our Private Capital Management business and possibly more from the $1B of acquisition opportunities we are actively reviewing. We expect that ARCenters will truly benefit from ARCP's best-in-class, investment grade platform given our dominant aggregation expertise and by having access to our deeply experienced acquisition, underwriting, leasing and asset management teams. We believe a tremendous opportunity exists for ARCenters to aggregate even more high-quality assets across the fragmented shopping center sector of over 100,000 assets in the U.S. with less than an estimated 5% owned by public companies or large institutional investors."
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