(Bloomberg News) Blackstone Group LP's Brixmor Property Group Inc., the second-largest owner of U.S. neighborhood shopping centers, plans to spend about $300 million to redevelop properties, its chief executive officer said.
The company, which changed its name from Centro Properties Group U.S. last month after Blackstone's $9.4 billion acquisition, plans to overhaul retail centers over the next five years to boost occupancy and income, Michael Carroll, CEO of New York-based Brixmor, said in an interview.
Blackstone bought the U.S. malls of Melbourne-based Centro Properties Group in June as the Australian company sought to pay debt incurred in an acquisition spree before the real estate slump. Centro's financial constraints limited how much money the U.S. unit could put into its properties, Carroll said.
"We have not been able to really focus on operating for the last several years," Carroll, whose company owns 585 shopping centers in 39 states, said by telephone. "It is a very unique time here in our company, effectively a new day where we can change the name, leave that former legacy behind and really try to reset this company to achieve its operating goals and really take it to a place that we want to take it to."
Brixmor, whose properties are mostly anchored by grocery stores or discount chains, may eventually sell shares to the public. A variety of options will be explored, the CEO said.
"It's a long way between where we are right now and the ultimate exit" that may occur in three to five years, Carroll said. "Clearly a public execution is a likely execution."
The company doesn't plan major changes to its portfolio, according to Carroll.
"We're really more of an operating story here than an acquisition or disposition story," he said.
Supermarket-Anchored Centers
Supermarket-anchored retail centers have attracted investors because of the perceived safety of properties that consumers have to visit for necessities in a slow-growing economy. Sales of such real estate in the first half of the year exceeded the total for all of 2010, according to research company Real Capital Analytics Inc.
Deals for community shopping centers have slowed amid a pullback in the market for commercial mortgage backed securities, according to Carroll.