The deal will be financed by Citigroup Global Markets Realty Corp. and Barclays Capital Real Estate as well as cash and short-term credit facilities. The parties expect to close the deal some time during the second quarter.

The deal involves 112 units of discounter ShopKo, totaling about 10 million sf, and 66 Pamida stores, a chain of units that cater to smaller markets, totaling about 2.2 million sf. The lease term for the ShopKos is 20 years while the Pamidas run at 15 years. Spirit executives expect to collect a 9.1% lease rate. A handful of stores will be left under Sun Capital ownership.

Green Bay, WI-based ShopKo was acquired by Sun Capital, of Boca Raton, FL, last year for about $880 million. The deal took the publicly traded retailer, which was experiencing drops in sales at the time, private.

Under the terms of the Spirit deal ShopKo's management will continue to run the stores, and no mass closures are expected, said Christopher Volk, Spirit's president and chief executive officer, during a conference call. "These stores have very nice market positions," he said. "We believe there is a lot of upside to be had."

In fact, Volk said ShopKo's ownership might consider adding new stores. The average ShopKo unit was built in 1985, and the average Pamida was constructed in 1990. But Spirit would not have the rights to any leases of new units.

If mass store closures do ensue, Volk said his company's hands aren't tied. "We have some flexibility from a substitution perspective. Down the road, things always change in this business."

The acquisition will bring Spirit, a sale-leaseback specialty firm, to 900 properties in its portfolio, with Minnesota, Texas and Wisconsin being its highest-exposure states. Before the ShopKo deal came into play, Spirit's management anticipated making $800 million in acquisitions for the entire year, but that target has now doubled.