American Realty to Buy 986 Properties From GE for $1.45 Billion

Monday, 03 Jun 2013 08:16 AM

 

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American Realty Capital Trust IV said it would buy a portfolio of retail properties from General Electric Co.'s financial arm for $1.45 billion as it looks to cut its dependence on its top 10 tenants.

ARCT, a U.S. real estate investment trust owned by the American Realty Capital group, said the purchase would reduce net operating income from its top 10 tenants to 39.5 percent of the total from 82.5 percent.

The deal with GE Capital will also more than double ARCT's annualized rental income to about $170 million from $71 million, the company said.

The purchase, which includes properties leased to Burger King Worldwide Inc., DineEquity Inc.'s, Applebee's and Yum Brands Inc.'s Pizza Hut and KFC, will increase the size of ARCT's total portfolio to about $2.3 billion.

ARCT IV said on Monday it would finance the deal with a combination of cash and debt.

This is the second deal between GE and American Realty Capital in less than a week as GE acts on its plan to shrink its dependence on its financial unit after the 2007-2008 global economic crisis.

American Realty Capital Properties Inc. said on Friday it would buy U.S. real estate assets from GE Capital for $807 million to expand in the net-lease sector, where tenants pay most of the operating costs.

GE also said on Friday it would sell its Canadian vehicle leasing business for about $553 million.

© 2014 Thomson/Reuters. All rights reserved.

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