Equity One Sells 36 Shopping Centers for $473M

MIAMI-As it marches toward its capital redeployment goals, Equity One just sold 36 shopping centers to Blackstone Real Estate Partners VII for $473 million. The shopping centers span about 3.9 million square feet.

“The sale of this portfolio is a significant milestone in our strategic plan as we execute on our capital recycling efforts,” Jeff Olson, CEO of Equity One, said in a statement. Most of assets are located in Atlanta, Tampa, and Orlando, but there are a few retail centers in North Carolina, South Carolina, Alabama, Tennessee, and as far north as Maryland.

Equity One will use sale proceeds largely to reduce debt, fund redevelopment and development projects, and to make new acquisitions. Olson pointed to the progress Equity One made in 2011 to dispose of non-strategic assets and to redeploy proceeds into its core target markets including New York, Boston, Miami, San Francisco, and Los Angeles.

“This is a great execution,” Jason Shapiro, managing director of Aztec Group, tells GlobeSt.com. “Relative to the broader market, this is an effective way to deploy capital at a time when it’s been difficult for both individual investors and larger investors like Equity One. Whenever you can get your arms around the metrics of a specific portfolio and deploy as much capital as they did it’s a good thing.”

Equity One has already started its acquisition spree in its target markets. In November, the REIT snapped up Culver Center, a 99% leased 216,578-square-foot shopping center for $115 million. The deal characterized Equity One’s acquisition strategy: major metropolitan market, severe supply constraints, strong tenant sales, below market rents, near term NOI growth, and opportunities for future redevelopment.

And this isn’t the first major disposition Equity One has completed in recent months. In October, the REIT focused on the multifamily sector. Equity One sold Trio Apartments and the Park Plaza office building in California for $124.9 million. Equity One also closed on the acquisition of Aventura Square in the affluent Miami submarket Aventura for $55.5 million in a deal that seemed to fly below the radar screen.

“Depending upon specific states, retail, multifamily, office and industrial, there might be differences in the abilities of companies to do what Equity One just did,” Shapiro says. “Plus, there is the opportunistic part of this deal. Capital markets influence the ability of those sorts of transactions to take place. Hopefully this deal is a segue into other portfolio transactions occurring, not only in retail but other sectors as well, over the course of 2012.”