Blackstone Group LP (BX:US), the largest private-equity firm, agreed to buy a majority stake in 40 U.S. shopping centers from UBS AB (UBS:US) property funds in a deal valued at about $1.1 billion, as it expands its retail holdings.
Kimco Realty Corp. (KIM:US), UBS’s joint-venture partner on the properties, will increase its ownership to 33 percent from 18 percent, David Henry, the retail landlord’s president and chief executive officer, said yesterday on a conference call with investors. The venture has about $692 million in debt on the properties, according to a filing (KIM:US) by New Hyde Park, New York- based Kimco. The portfolio is 5.7 million square feet (530,000 square meters) and was 96.1 percent leased at the end of 2012.
Blackstone, based in New York, is adding retail properties as rents and occupancies rise. Shopping-center vacancies dropped to 10.7 percent in the fourth quarter from 10.8 percent in the previous three months and 11 percent a year earlier, according to New York-based data provider Reis Inc. Effective rents, or what’s paid after any landlord discounts, averaged $16.59 a square foot, up from $16.51 a year earlier.
“Blackstone is essentially stepping into the shoes of UBS,” David Bujnicki, a spokesman for Kimco, said in a telephone interview. He declined to disclose details of the transaction.
Peter Rose, a spokesman for Blackstone, didn’t immediately return a telephone call seeking comment on the deal.
Blackstone (BX:US) in 2011 bought the U.S. shopping centers of Australia’s Centro Properties Group for $9 billion and renamed the company Brixmor Property Group Inc. Last year, Blackstone formed a partnership with Beachwood, Ohio-based DDR Corp. to buy 46 U.S. centers for $1.43 billion from a unit of Tel Aviv-based Elbit Imaging Ltd.
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