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UPDATE 1-Blackstone-controlled Brixmor's shares rise 4 pct in debut

Tanya Agrawal
Wednesday, 30 Oct 2013 | 11:08 AM ET

* Brixmor valued at about $6.1 bln

* Brixmor raises $825 mln

* Second largest U.S. retail real estate IPO

Oct 30 (Reuters) - Shares of Brixmor Property Group Inc , a shopping center company owned by Blackstone Group LP , rose as much as 4 percent in their market debut as investors were drawn to the second-largest U.S. retail real estate company offering.

The REIT raised $825 million on Tuesday after its initial public offering was priced at $20 per share, the mid-point of the range. On Tuesday, Brixmor increased the size of the offering by 10 percent and sold 41.3 million shares.

The New York-based company's shares were up 2.5 percent at $20.49. They had risen to $20.85 on Wednesday morning, valuing the company at about $6.1 billion.

Brixmor's offering is the largest retail real estate IPO since Simon Property Group Inc raised about $840 million in 1993.

Brixmor's IPO is closely watched by investors as it paves the way for Blackstone to bring other companies from its massive real estate holdings to the public market.

Blackstone has filed IPO plans for U.S. hotel operator Hilton Worldwide Inc and budget hotel operator Extended Stay America. It may sell or list budget hotel chain La Quinta Inns & Suites.

Blackstone is not selling any shares in the Brixmor offering and will continue to own about 73 percent of the company after it goes public while private equity firm Centerbridge Partners will own about 8.3 percent.

This year has been the busiest for U.S. property offerings in about a decade as investors look to take advantage of a fall in commercial property vacancies and low interest rates.

Empire State Realty Trust Inc, owner of the iconic Empire State Building, raised about $1.07 billion earlier this month, while California-based homeowner American Homes 4 Rent raised about $812 million in August.

With 87 million square feet of gross leasable area, Brixmor is the second-largest owner of neighborhood shopping centers after Kimco Realty Corp.

Brixmor owns 522 shopping centers across the United States and counts Kroger Co, T.J. Maxx chain parent TJX Cos Inc , Publix Super Markets Inc and Wal-Mart Stores Inc as its four largest tenants by annualized base rent.

The company said in an IPO filing that grocery chains form 70 percent of its tenants and that its portfolio is 92 percent occupied. ()

Blackstone acquired nearly all of Brixmor's properties when it bought more than 700 U.S. real estate properties from Centro Properties Group, a struggling shopping center company based in Australia, for $9.2 billion in 2011.

It was Blackstone's third-largest real estate investment.

Real estate has been the chief driver of Blackstone's financial success, and Jonathan Gray, global head of real estate is seen as a candidate to succeed Chief Executive Stephen Schwarzman.

Real estate accounted for 64.7 percent of Blackstone's economic net income (ENI) in the third quarter. ENI is a measure of profitability that takes into account the mark-to-market value of its portfolio.

Bank of America Merrill Lynch, Citigroup, JP Morgan, Wells Fargo Securities and Barclays were the lead underwriters for the IPO.

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