Brixmor Raises $825M in Public Debut

NEW YORK CITY-In the second-largest real estate IPO of 2013, Brixmor Property Group raised $825 million Tuesday, excluding overallotment allowances for underwriters, and began trading Wednesday morning on the New York Stock Exchange under the ticker symbol BRX. The shopping center REIT's debut, which traded 41.25 million shares at $20 apiece, marks the first of what's likely to be a new series of publicly traded spinoffs of property companies from the Blackstone Group; its SeaWorld Entertainment unit went public this past spring.

The IPO is the second largest on record for a retail REIT; Simon Property Group's 1993 debut raised $840 million. Year to date, the largest real estate IPO has been Empire State Realty Trust's launch earlier this month. Bloomberg reported that the REIT backed by the Empire State Building and other office and retail properties raised $1.07 billion in its launch.

Brixmor's offering adds to a tally that's already the biggest for real estate IPOs since 2004, Bloomberg reported. Thus far this year, real estate IPOs had totaled $3.9 billion before New York City-based Brixmor began issuing stock. For all of 2012, the total was $3 billion, compared to $7 billion raised in 27 CRE IPOs nine years ago.

In its SEC filing, Brixmor says it owns and operates the largest wholly owned portfolio of grocery-anchored community and neighborhood shopping centers in the US. The IPO portfolio is comprised of 522 shopping centers totaling approximately 87 million square feet of GLA, with all but one of those centers 100% owned.

“Our high quality national portfolio is well diversified by geography, tenancy and retail format, with more than 70% of our shopping centers anchored by market-leading grocers,” according to Brximor's filing. The REIT's four largest tenants by ABR are the Kroger Co., TJX Cos. Inc., Publix Super Markets and Wal-Mart Stores Inc.

“We believe that we have taken advantage of our time as a private company to position ourselves with our IPO portfolio and with an efficient operating and management infrastructure to support it,” according to the SEC filing. “As a publicly traded company we do not expect to face the legacy issues that many of our peers face as a result of the global financial crisis and strategic plan modifications,” among them significant non-core asset sales, stalled new developments, resolving of joint ventures and operating platform modifications.

Blackstone, which will continue to own a majority of the voting power of shares, had formed Brixmor after acquiring Centro Properties Group's US assets in 2011 for $9 billion. The private equity giant has also filed for IPOs of Extended Stay America Inc. and Hilton Worldwide Holdings Corp., both in the hospitality sector.