NEW YORK CITY—What began as a 100-million-share stock saleearlier this week has ended up totaling 138 million shares when theunderwriters on American Realty CapitalProperties' public offering had their say. The netlease REIT said Thursday evening that underwriters hadfully exercised their overallotment option, buying an additional 18million shares at $12 apiece, culminating one of the largestREIT equity offerings on record.

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ARCP is expecting total net proceeds of $1.59 billion from theupsized stock sale, which law firm Proskauer Rosesaid was the third largest stock offering in REIT history at 120million shares before the underwriters exercised their option.Despite its coinciding with the acquisition announced last week ofmore than 500 Red Lobster properties in a $1.5-billionsale-leaseback, the stock sale will not be used to fund that deal,but instead will go for paying down debt and other generalcorporate purposes.

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As GlobeSt.com reported earlier this week, the Red Lobster SLBwill be funded via recycled capital from the sale of substantiallyall of ARCP's multi-tenant shopping center portfolio toBlackstone Real Estate Partners VII for $1.98 billion in cash. The11.7-million-square-foot portfolio came as part of ARCP's$11-billion merger with Cole Real Estate Investments, which closedthis past February.

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Originally, the portfolio was to be spun off into a separateREIT that would have been known as American Realty Capital Centers.“The previously announced spin-off of our multi-tenant portfoliocreated visibility and optionality for ARCP in connection with itsmulti-tenant assets,” Nicholas Schorsch, ARCP'sexecutive chairman and CEO, said earlier this week. “Thus, we wereable to explore various avenues to create stockholder value duringthe time we prepared for the spin-off. We now believe the sale ofthe multi-tenant portfolio will deliver the best value creationoption to our shareholders and serve to enhance the clarity of oursingle-tenant, net lease investment strategy, further simplifyingand rationalizing our business plan.”

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BofA Merrill Lynch, Citigroup,Barclays, J.P. Morgan,Capital One Securities, CreditSuisse, Deutsche Bank Securities andWells Fargo Securities acted as joint bookrunnersfor the offering. Proskauer advised ARCP on the stock offering.

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Separately, ARCP announced earlier this week that in view of theRed Lobster deal meeting its full-year acquisitions target of $3billion, it would raise the bar to $4.5 billion in buys forcalendar 2014.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.