Kite Realty Group is acquiring Retail Properties of America in a $2.79 billion all-stock deal that would see the creation of one of the biggest shopping-center owners in the U.S.
With the acquisition, Kite Realty’s portfolio will include a total of 185 open-air shopping centers, covering 32 million square feet of leasable space in mostly warmer and cheaper metropolitan areas in states such as Florida and Texas. The bulk of the shopping centers in the company’s portfolio have a grocery component attached to them.
“This merger further demonstrates our conviction in open-air retail centres as essential shopping destinations and last-mile fulfilment centers,” Kite Chief Executive Officer John Kite said.
Under the terms of the deal, Kite Realty’s shareholders are expected to own nearly 40 percent of the combined entity’s equity, while investors of Retail Properties will own the remaining 60 percent. The Indianapolis-based company will also assume all of the Retail Properties’ debt. As a precautionary measure, the company has obtained a $1.1 billion bridge loan if debt consent cannot be obtained in time.
The deal is still subject to approval from both companies’ shareholders and is expected to close in the fourth quarter of this year.
Kite Realty’s acquisition comes just three months after Kimco Realty Corp. acquired Weingarten Realty Investors for nearly $3.9 billion.