NEW YORK CITY—In one of the largest sale-leasebackdeals in recent memory, American Realty CapitalProperties Inc. said Friday morning it has agreed to buymore than 500 Red Lobster restaurants for $1.5billion. The deal was announced in conjunction with GoldenGate Capital's $2.1-billion acquisition of the nationwideseafood chain from Darden Restaurants, alsoannounced Friday morning.

The deal, which is subject to the completion of Golden Gate'spurchase of the chain, comes in at a 9.9% GAAP cap rate. “Whenconsummated, the Red Lobster transaction will allow us to achievethe high end of our acquisition guidance which we set at $3.0billion for the entire year of 2014,” says ARCP presidentDavid S. Kay. “We previously promised acquisitionsat cap rates north of 8% and have done so this year in smallself-originated transactions; now, we have duplicated that efforton a large scale.”

Approximately 93.5% of the portfolio's leases will be structuredwith a 25-year initial term and approximately 6.5%, constitutingleasehold assets, will have a weighted average 18.7-year initialterm. The portfolio master leases will also include 2% annualcontractual rent escalations.