RPT Realty (RPT) announces formation of $1.2 billion net lease fund.

RPT Realty (RPT) announced today that has formed a $1.2 billion managed investment fund targeting the acquisition of net lease retail properties.  RPT said that it expects to seed the fund with an initial contribution of  42 single-tenant assets from its current portfolio, which are valued at approximately $151 million.  In addition to RPT, the fund's partners include GIC Private Limited, Zimmer Partners, and Monarch Alternative Capital LP., who have collectively committed to provide up to $470 million in total equity capital.  The RGMZ partnership expects to utilize between 60-65% leverage and has received an initial commitment for a $175 million acquisition credit facility.

According to an investor presentation also released today, the RGMZ fund will provide RPT with the ability to acquire conventional multi-tenant shopping center properties, and carve out the single-tenant portion portion of the centers for contribution to the fund.  This would allow RPT to take advantage of arbitrage opportunities between multi-tenant and single-tenant properties, with the latter often leased to investment grade tenants with longer lease terms.  The fund will also pursue conventional growth opportunities including secondary market purchases and direct purchases from retailers.

Established in 1996, RPT Realty is an equity retail REIT focusing on the ownership, development and management of open-air shopping centers in larger MSA's including Detroit, Cincinnati, Miami, Jacksonville, and Minneapolis. As of December 31, 2020, the company's portfolio included 44 consolidated properties and another five centers owned in a joint venture. RPT has a total market capitalization of $1.8 billion and is a member of the S&P SmallCap 600 index.