Spirit Finance on block, owners seek $3.5 billion: source

NEW YORK (Reuters) - Spirit Finance Corp is up for sale, with its owners, including Macquarie Group , seeking about $3.5 billion for the U.S. real estate investment trust, a source familiar with the matter said on Wednesday.

The group has approached companies, including National Retail Properties , Lexington Realty Trust and Realty Income Corp , the source said.

Barclays Capital and Macquarie are advising on a possible sale, the source said.

Spirit, which focuses on retail properties such as auto dealers, drugstores and supermarkets, owned or financed 1,157 properties in 45 states, according to Standard & Poor's. It held $3.5 billion of real estate on its balance sheet at the end of last year, with debt totaling $2.9 billion, according to S&P.

Spirit's owners, which include Iceland's Kaupthing Bank of and other independent equity participants, bought the REIT for about $3.5 billion, including some $1.9 billion of debt, in 2007 amid a real estate merger frenzy.

Macquarie and Barclays declined to comment on the report. Scottsdale, Arizona-based Spirit, National Retail, Lexington and Realty were not immediately available for comment.

Bloomberg first reported the story.

In April this year, the founders of Spirit, Morton Fleischer and Christopher Volk, sued a unit of Macquarie, accusing it of "gravely" harming the REIT.

In a court complaint, Spirit's founders said Macquarie and its partners resisted recapitalizing the company to protect their controlling majority.

(Reporting by Paritosh Bansal; editing by Carol Bishopric)