Non-Traded REIT Agrees to Buy Southway Shopping Center in Houston for $29.2M

Southway Shopping Center in HoustonPublicly registered, non-traded REIT American Realty Capital – Retail Centers of America, Inc. has entered into an agreement to acquire the Southway Shopping Center in Houston, TX. The seller of the property is FP Southway, LLC.

The contract purchase price of the Southway Shopping Center is $29.2 million, exclusive of closing costs. The Company intends to fund 50 percent of the purchase price with proceeds from its ongoing IPO and the remainder with debt financing.

The acquisition is subject to the satisfactory completion of a due diligence review of the property, among other conditions. There can be no assurance that the acquisition will be consummated.

The Southway Shopping Center contains approximately 182,000 rentable square feet and is 100.0 percent leased to 23 tenants. Three tenants, Best Buy, Inc., Ross Stores, Inc. and The TJX Companies, Inc. represent approximately 48.4% of the annualized rental income of the property.

The lease to The TJX Companies Inc. contains approximately 34,000 rentable square feet. The lease commenced in April 2006, has a 10-year term and expires in April 2016. The lease contains no rental escalations during the original lease term. The lease contains four renewal options of five years each. The annualized rental income for the initial lease term is approximately $0.3 million.

The lease to Ross Stores, Inc. is 32,000 rentable square feet. The lease commenced in November 1992, has a 25-year term and expires in January 2019. The lease contains no rental escalations during the original lease term. The lease contains three renewal options of five years each. The annualized rental income for the initial lease term is approximately $0.3 million.

The lease to Best Buy, Inc. contains approximately 30,000 rentable square feet. The lease commenced in October 2007, has a 10-year term and expires in January 2018.  The lease contains no rental escalations during the original lease term. The lease contains three renewal options of five years each. The annualized rental income for the initial lease term is approximately $0.5 million.