SITE Centers Spins Off Convenience Assets Into Separate REIT

SITE Centers plans to spin off its convenience assets into a separate publicly traded REIT to be named Curbline Properties Corp.

SITE owns open-air shopping centers in suburban, high-household income communities in a mix of grocery, lifestyle, net lease, and regional power center properties. The spin off is testament not only to the strength of the convenience store sector but also to strip malls’ growing dominance in retail.

“CURB’s balance sheet upon separation from SITE Centers is expected to position Curbline for significant asset growth in a period of market disruption, providing a compelling competitive advantage in a fragmented yet liquid marketplace,” David R. Lukes, President and Chief Executive Officer, said in prepared remarks.

SITE’s retail assets are in states with average household incomes of $109,000 (88th percentile as compared to all shopping centers in the United States) and 69% of the wholly owned portfolio is anchored by a grocer or warehouse club.

Its top tenants include Starbucks (2.3% of ABR), Darden (2.0%), JPMorgan Chase (1.4%), Verizon (1.3%) and Chipotle (1.2%).

The median asset size of the CURB portfolio as of Sept. 30 is 20,000 square feet with 91% of base rent generated by units less than 10,000 square feet. It owns 61 properties.

Morgan Stanley & Co. LLC and Wells Fargo are acting as lead financial advisors and Jones Day is serving as legal counsel to SITE Centers.