Bloomin Brands is latest corporate player to unlock cash tied up in real estate
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Apr 26, 2016

Bloomin' Brands Inc. (Nasdaq: BLMN) is cashing in on rising commercial property values and investor demand for single-tenant retail properties.

On its quarterly earnings call Tuesday, Tampa-based Bloomin' said it has completed an agreement to sell 41 properties in a sales-leaseback transaction for $141 million. In a sales-leaseback, a business sells its real estate to an investor and immediately signs a lease with the buyer.

"We used a portion of these proceeds to pay down $87.6 million on our bridge loan," the company said in its earnings report.

Bloomin' did not disclose the net proceeds from the sale, though David Deno, chief financial officer, said it was "far better" than $87.6 million.

Bloomin' is the parent company for Outback Steakhouse, Carraba's Italian Grill, Bonefish Grill and Fleming's Prime Steakhouse & Wine Bar.

Several companies have turned to their real estate to generate cash in recent years. Retailers like Sears Holdings Corp. (Nasdaq: SHLD) and Macy's Inc. (NYSE: M) are among the most high profile to monetize their property.

The Bloomin' restaurant properties are held in an entity called PropCo, and there are 215 left in the portfolio, Deno said on the earnings call. Approximately 40 of those are potential relocation opportunities.

"Given the attractive real estate environment and the high level demand for these properties, we intend to pursue additional sale-leaseback deals through a combination of individual as well as larger institutional transactions," Deno said.

Deno said the company expects to "substantially complete the sale of the available portfolio by early 2017."

Ashley Gurbal Kritzer is a reporter for the Tampa Bay Business Journal.