Boston, MA 05/13/2014 (wallstreetpr) – Retail Properties Of America Inc (NYSE:RPAI) is a $3.5 billion real estate company with about 227 properties across the U.S. The company also owns and operates shopping centers in the U.S.
There has been growing interest in shopping center investments and real estate companies across the nation are looking to consolidate positions in these properties or even putting in more money to acquire them.
As for the case of RPAI, the company has agreed to acquire the 80 percent stake in MS Inland that it does not already own. The joint venture is valued at $292.5 million, of which its partner owns 80 percent interest with a value of $234 million. The portfolio of MS Inland includes six shopping centers. The retail assets have floor spaces totaling 1.2 million sq ft.
If all goes as planned, the transaction will close next month.
A robust industry
The strengthening economic environment is having its positive impact on real estate companies. The companies face almost insatiable demand for office and retail and residential spaces, thanks to the high expansion rate among U.S. companies and an increase in jobs.
Real estate companies are also enjoying good prices amid overwhelming demand. As such, by seeking to dissolve MS Inland, Retail Properties Of America Inc (NYSE:RPAI) hopes to boost its portfolio as it positions itself for the anticipated strong demand.
The properties
The six shopping centers include Gardiner Manor Mall in Bay Shore, Oswego Commons in Oswego, Huebner Oaks Shopping Center in San Antonio, Lincoln Park Shopping Center in Dallas, Commons in Royal Palm Beach and Johns Creek Village in Duluth. The properties had 95.5 percent occupancy by end of 1Q2014. That occupancy rate is above the average of 94.3 percent that Retail Properties Of America Inc (NYSE:RPAI) enjoys across its portfolio.
According to the CEO, Steve Grimes, the transaction will in addition to enhancing the company’s portfolio, simply its balance sheet, as well.
Retail Properties Of America Inc (NYSE:RPAI) had FFO of $63 million or 27 cents per share. That was better than $52.2 million or 23 cents per share in 1Q2013.
