American Realty Capital – Retail Centers of America, Inc. (ARC—Retail Centers) has entered into purchase and sale agreements for two separate properties. Sponsored by American Realty Capital IV, LLC, ARC—Retail Centers is a publicly registered, non-traded REIT that seeks to create a diversified portfolio of core retail properties, which include lifestyle centers, power centers, and large needs-based shopping centers.
The first property, Prairie Town Center, is located in Schaumburg, Illinois and contains around 289,000 rentable square feet. It is 95.3% leased to seven tenants with two tenants, Kohl’s and Lowe’s, accounting for 90.5% of the property’s annualized rental income. Kohl’s lease expires in January, 2024 and Lowe’s expires in July 2025. Exclusive of closing costs, the contract purchase price is approximately $25.5 million.
ARC—Retail Centers has also agreed to purchase Southway Shopping Center in Houston, Texas. The property contains 182,000 rentable square feet and is leased to 23 tenants. Best Buy, Ross Stores, and Marshall’s represent about 48.4% of the property’s annualized rental income and their leases expire in January 2018, January 2019, and April 2016, respectively. The contract purchase price of the Southway Shopping Center is approximately $29.2 million, exclusive of closing costs.
ARC—Retail Centers intends to fund 50% of each purchase price with funds from its ongoing initial public offering and the rest with debt financing.
In addition, on April 3, 2014, the company closed its acquisition of The Streets of West Chester lifestyle center, located in West Chester Township, Ohio at a contract purchase price of $40.5 million, exclusive of closing costs. The property contains 167,155 rentable square feet and is 94.5% leased to 13 tenants. ARC—Retail Centers funded the acquisition with proceeds from the sale of its common stock.