THEATER CHAIN TO LAUNCH REAL ESTATE SPINOFF.

Byline: Dave McNary Daily News Staff Writer

AMC Entertainment, originator of the new breed of giant megaplex theaters, will face a crucial test on Wall Street shortly.

The company plans to launch a real estate investment trust spinoff as early as this week, offering 13.8 million shares at a proposed price of $19 to $21 a share.

The Entertainment Properties Trust will buy a dozen of the prime AMC sites, including the Promenade 16 in Woodland Hills and the Ontario Mills 30, for $249 million and lease them back to AMC.

The deal will give AMC fresh cash and accelerate its already-aggressive expansion plan - one that currently calls for adding 1,100 screens over the next three years, or a $1.1 billion investment based on estimates of $1 million per screen. That's a tricky strategy for a company carrying $400 million in long-term debt without resorting to taking on high-priced borrowing.

In addition to helping improve AMC's balance sheet, the REIT may also buy theaters from other chains or erect new facilities itself.

``What this does is give AMC the flexibility to seize the prime sites for new megaplexes because they'll have two wet wells to go to,'' said Kevin Skislock, an analyst with Irvine-based investment bank L.H. Friend Weinress Frankson & Presson. ``Instead of saying when there are five sites available that they can only buy three, they can now buy all five.''

AMC launched the megaplex era in May 1995 with a 24-screen complex in Dallas and has since opened 30 other such theaters with 594 screens. Its success has pushed other chains such as Regal, Edwards and Pacific to invest in similar facilities with plush snack bars, and high-slope ``stadium'' seating in auditoriums with large curved screens.

The creation of AMC's REIT also comes amid a growing trend of moving real estate off corporate balance sheets in such areas as health care and prisons. Simon DeBartolo Group, a prominent mall REIT, recently announced a venture with Donaldson Lufkin & Jenrette to buy entertainment properties, presumably including movie houses.

Additionally, deep-pocket investors have been moving into the exhibition business, with Kohlberg Kravis Roberts buying Act III Theaters for $660 million and Hicks Muse Tate & Furst taking over the United Artists chain for $850 million.

Some observers have questioned the long-term outlook for Entertainment Properties Trust, noting that the megaplexes may become obsolete quickly and have few alternative uses. Skislock believes these worries are unfounded.

``There are a lot of very successful REITs that do not have a lot of alternative uses,'' Skislock said. ``I think this is a super deal because these will be the last of their theaters to go obsolete since they represent the cutting edge in product development.''

Skislock believes that the economics of moviegoing have been altered forever by the presence of the megaplexes because customers prefer having the larger variety of movies and start times in a single location. Patronage per megaplex screen is 30 percent higher than at conventional locations, he notes.

That means moviegoers are seeing movies much sooner after their release date than a few years ago - mostly during the first two weeks. That's good news for studios, since exhibitors typically give 90 percent of ticket revenues back to them in the early periods, and for megaplex operators as well, because of the huge profits from snack bars.

``The economics of megaplexes are going to continue to draw a strong flow of capital,'' Skislock said. ``You'll also see multiplexes continue to have a tough time. They'll fade faster than anyone expected.''