ORLANDO—Add Darden Restaurants Inc. to theroster of retail companies planning a REITspinoff. The owner of brands including OliveGarden and Capital Grille said Tuesdaythat its board had approved a strategic plan to pursue a separationof a portion of the company's real estate assets, via combinationof sale-leasebacks of individual locations and aseparation of about 430 owned properties into a standalone company.The goal is to retire about $1 billion in debt via monetization ofthe real estate.

The sale-leaseback program of individual restaurants is alreadyunder way, with 75 properties listed at expected cap rates of 5.5%on the sales. Of those, about 30 deals have already been completed,Darden said Tuesday. Additionally, the company plans an SLB of itsOrlando Restaurant Support Center property and buildings.

Under the plan announced Tuesday, the spinoff REIT—whichinitially will focus on the Olive Garden brand—would lease backsubstantially all of its “prudently selected” properties to Darden,according to an investor presentation. Darden says the spinoffcompany, which it expects to separate by the end of 2015, would bewell positioned to expand through real estate acquisitions of otherbusinesses.

Continue Reading for Free

Register and gain access to:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

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.