Brixmor Property Group Inc. and Everview Partners have agreed to acquire Toronto-based Slate Grocery REIT in a transaction valued at $2.34 billion, advancing their presence in the grocery-anchored retail sector. The deal is structured so that Brixmor will directly acquire a defined portfolio, while a new institutional joint venture between Brixmor and affiliates of Everview will take ownership of the remaining assets.
Under the definitive agreements, Brixmor is set to acquire 23 grocery-anchored shopping centers totaling approximately three million square feet for $636 million. These 23 properties are reported to be about 96% leased and are located entirely within Brixmor’s existing operating footprint, with a concentration across Florida, Georgia and the Carolinas. The balance of Slate Grocery REIT’s holdings, comprising 92 additional assets, will be acquired by a newly formed joint venture between Brixmor and affiliates of Everview for $1.71 billion.
In connection with the joint venture, a wholly owned subsidiary of the Abu Dhabi Investment Authority will participate as a strategic investor alongside Everview. The involvement of the Abu Dhabi Investment Authority’s subsidiary adds an additional institutional capital source to the partnership backing the acquisition of the larger portfolio tranche.
Brixmor president and CEO Brian T. Finnegan described the acquisition as immediately accretive and aligned with the company’s stated growth strategy. He noted that the 23 grocery-anchored centers being acquired by Brixmor are in markets already familiar to the company and supported by grocer relationships it intends to expand. Finnegan also highlighted that both the wholly owned and joint venture portfolios offer embedded value potential, citing below-market rents and what he characterized as a robust pipeline of remerchandising, redevelopment and outparcel opportunities that Brixmor believes can translate into cash flow growth over time.
On the advisory side, RBC Capital Markets, LLC is serving as lead financial advisor to Brixmor, and Wells Fargo Securities is acting as a financial advisor to both Brixmor and the joint venture entity formed with Everview. Cushman & Wakefield has been engaged as real estate advisor, while Hogan Lovells and Cadwalader, Wickersham & Taft LLP are providing U.S. legal counsel to Brixmor.
Everview is being advised by Simpson Thacher & Bartlett LLP as its legal counsel. Davies Ward Phillips & Vineberg LLP is acting as Canadian counsel to both Brixmor and Everview in connection with the cross-border aspects of the transaction. On the financing side, Royal Bank of Canada has provided Brixmor with a bridge commitment intended to fully fund Brixmor’s required capital for the acquisition of its 23-asset portfolio.
For the joint venture’s acquisition of the remaining 92 assets, Wells Fargo Bank, N.A., as administrative agent, together with Royal Bank of Canada, has extended a debt commitment. Wells Fargo Securities and Royal Bank of Canada are expected to serve as joint bookrunners for the joint venture financing. The portfolio includes assets such as Slate Grocery REIT’s Errol Plaza in Apopka, FL, reflecting the strategy’s focus on grocery-anchored shopping centers in established markets.
