NEW YORK CITY—American Realty CapitalProperties said Wednesday it plans to sell substantiallyall of its multi-tenant shopping center portfolioto a Blackstone Group fund for $1.98 billion incash. Proceeds from the sale would then be recycled to fund the netlease REIT's $1.5-billion Red Lobster portfolio acquisition, which itannounced this past Friday.

The pending sale to Blackstone Real Estate Partners VII followsup ARCP's announcement in March that it planned to spin off themulti-tenant retail into a separate REIT, to be known as American RealtyCapital Centers Inc. Instead, most of the 11.7-million-square-footportfolio that would have comprised ARCC's holdings will trade toBlackstone, although ARCP would continue to own 18 shopping centerstotaling 1.7 million square feet. The portfolio came into ARCP'sfold as a result of its $11-billion merger with Cole Real EstateInvestments earlier this year.

“We continued to look at options to create stockholder valuethrough a disposition of our multi-tenant assets, and we believethat through the sale to Blackstone of the multi-tenant shoppingcenter portfolio, we have accomplished this,” says David S.Kay, ARCP's president. “This sale will allow us to acquirewhat in our view are the 500 best Red Lobster stores profitably byselling our multi-tenant portfolio at a cap rate that is more than100 basis points lower than the 7.9% cash cap rate for the RedLobster portfolio.”