Spirit Finance In $815M ShopKo Deal

SCOTTSDALE, AZ-Spirit Financial Corp. is acquiring most of ShopKo Stores’ real estate assets from the retailer’s parent company Sun Capital Partners for $815.3 million. Spirit will acquire all of ShopKo’s outstanding stock and then enter a long-term triple-net lease agreement with the chain.

The deal will be financed by Citigroup Global Markets Realty Corp. and Barclays Capital Real Estate as well as cash and short-term credit facilities. The parties expect to close the deal some time during the second quarter.

The deal involves 112 units of discounter ShopKo, totaling about 10 million sf, and 66 Pamida stores, a chain of units that cater to smaller markets, totaling about 2.2 million sf. The lease term for the ShopKos is 20 years while the Pamidas run at 15 years. Spirit executives expect to collect a 9.1% lease rate. A handful of stores will be left under Sun Capital ownership.