Zacks_Analysts' Blog : Equity One to Shed Assets - Analyst Blog

Equity One Inc. (EQY) recently announced that it has entered into an agreement with Blackstone Real Estate Partners VII to sell 36 shopping centers for $473.1 million. The transaction is expected to close by the fourth quarter of 2011.

The proceeds from the disposition of theses assets will be used to retire debt and fund its redevelopment pipeline, as well as for future acquisitions and other corporate purposes.

The 36 shopping centers are primarily located in Atlanta, Tampa and Orlando spanning about 3.9 million square feet. These assets were burdened by mortgage loans having an aggregate amount of approximately $177.4 million as of June 30, 2011.

The agreement is a strategic move on the company’s part to reposition its portfolio by shedding non-strategic assets and investing in higher growth markets, which would thereby enable it to upgrade its portfolio. The company's primary strategy is to concentrate its portfolio in the urban retail markets of New York, Miami, Boston, San Francisco and Los Angeles.

Equity One is a real estate investment trust (REIT) that engages in the ownership, management, acquisition and development of neighborhood and community shopping centers in the United States. As of June 30, 2011, the company owned or had interests in 199 properties, consisting of 176 shopping centers encompassing 20.7 million square feet of space.

Equity One currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Kimco Realty Corporation (KIM) also holds a Zacks #3 Rank.