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California-based firm grabs Dallas' Spirit Realty for $9.3 billion in stock - The Dallas Morning News

Author: based firm grabs Dallas' Spirit Realty for $9.3 billion in stock

Source: https://www.dallasnews.com/business/real-estate/2023/10/30/dallas-spirit-realty-agrees-to-sale-valued-at-93-billion/

Image of California-based firm grabs Dallas' Spirit Realty for $9.3 billion in stock - The Dallas Morning News

Spirit Realty acquired Dallas' Prestonwood Country Club in 2021.(DMN files)A Dallas-based real estate investor is getting gobbled up by a larger California-based property firm in a $9.3 billion deal.Spirit Realty Capital Inc.owns more than 2,000 properties nationwide – mostly retail stores and warehouses it acquires from companies that continue to occupy the buildings long-term.Spirit Realty moved to Dallas from Arizona in 2015.The largest share of the company’s properties are in Texas.Spirit Realty agreed to be bought by San Diego-based Realty Income Corp in an all-stock deal.Realty Income is in the same net-lease real estate investment business, with more than 13,000 properties including stores and warehouses across the U.S.and in Europe.D-FW Real Estate NewsGet the latest news from Steve Brown and the business staff.The combined real estate investment trusts will have an estimated value of $63 billion, which Realty Income officials say will expand its opportunities for future growth.Read more D-FW real estate newsBy the numbers: Nation’s growth hotspots face off in Rangers, Diamondbacks World SeriesThe Rangers and the Diamondbacks represent cities, metro areas and states on the forefront of the nation’s growth, leading the way in home price, population and job growth.Investors buy 1,300-acre development site near Forney in Kaufman CountyA group of Texas-based investors has purchased 1,300 acres in Kaufman County east of Dallas with plans to for a future residential community.“We expect that this transaction will create immediate and meaningful earnings accretion, while enhancing the diversification and depth of our high-quality real estate portfolio,” Sumit Roy, president and chief executive officer of Realty Income, said in a statement. “Spirit’s assets are highly complementary to our existing portfolio, extending our investments in industries that have proven to generate durable cash flows over several economic cycles.“We also believe this merger will strengthen our longstanding relationships with existing clients and allow us to curate new ones with partners whose growth ambitions can accelerate alongside Realty Income.”Both Spirit Realty and Realty Income target retailers and other firms that want to reap capital from company-owned properties.In 2021, Realty Income purchased a large warehouse in North Fort Worth occupied by an Amazon fulfillment center.Spirit Realty collects almost $695 million in annual rents from retailers including Life Time Fitness, At Home, Dollar Tree and Home Depot that cash out of their real estate to occupy the buildings on long-term leases.Spirit Realty owns more than a dozen At Home stores.(Juan Figueroa / Staff Photographer)Spirit Realty also owns more than 20 private golf and country clubs operated by Dallas-based Invited Clubs, formerly known as ClubCorp.In 2021, Spirit Realty acquired from ClubCorp the popular Prestonwood Country Club in Far North Dallas.“Merging with Realty Income offers Spirit’s shareholders immediate value by providing a more competitive cost of capital, an A-rated balance sheet, broader tenant diversification, and the ability to leverage economies of scale,” Spirit Realty CEO Jackson Hsieh said in a statement.Under terms of the merger agreement, Spirit Realty shareholders will be compensated with stock in Realty Income.The transaction is expected to close in early 2024.The acquisition of Spirit Realty will not require significant new debt.Realty Income plans to assume about $4.1 billion of existing Spirit debt at a weighted average interest rate of 3.48%.The combined companies’ largest share of properties will be convenience stores.About 15% of the merged firms’ rents will come from industrial real estate.Realty Income has been in business for 54 years. Last year the investor expanded into gaming real estate with the $1.7 billion acquisition of the Wynn Encore Boston Harbor Resort and Casino.After convenience stores, its largest holdings include supermarkets, dollar stores, home improvement stores and drug stores.Top Business Stories

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