Glimcher Realty Trust has agreed to purchase the land for all three phases of its Scottsdale Quarter development project in Scottsdale, Ariz., from affiliates of existing joint venture partners, Wolff Co. and Vanguard City Home, for approximately $120 million.
Upon the closing of the transactions covered by the purchase agreements, the existing joint venture arrangement will be terminated, giving Glimcher full control and ownership over all improvements, in addition to the land. Upon closing, the joint venture partner will be released from all obligations related to the project.
“Continuing to invest in a project of Scottsdale Quarter’s caliber is consistent with our goal of improving portfolio quality,” Glimcher Chairman and CEO Michael P. Glimcher said in a statement. “Having full control of both the ground and the improvements enhances the overall value of our investment in this premier property.”
Scottsdale Quarter includes approximately 600,000 square feet of retail and office space. Glimcher previously owned 50 percent of the project in a joint venture. Phase I of Scottsdale Quarter opened in 2009 with Phase II scheduled to come on line in the fall of 2010. When completed, Scottsdale Quarter will contain more than 1 million square feet of retail and office space, as well as residential units and a hotel.
About 14.5 acres of land for the first two phases of the project is currently owned by Glimcher’s joint venture partner and is leased to the joint venture. The ground lease has a term of 99 years and has an annual ground lease payment of approximately $5.5 million a year with certain escalations in payment over the term of the lease. (Glimcher already owned the existing vertical construction on the land.)
The third phase constitutes undeveloped land adjacent to the first two phases that was initially planned to be developed independently by Glimcher’s joint venture partner with the retail component being delivered to Scottsdale Quarter through condominium rights.
Barry Gabel and Mindy Korth of CB Richard Ellis’s Phoenix office, along with Bob Smith, Paul Jones, Karen Scholte, Ray Eldridge, Kevin Shannon and Chapin Hunt in the firm’s Orange County, Calif., and Los Angeles offices negotiated the sale of a 14.5-acre ground lease parcel at Scottsdale Quarter. CBRE reported the transaction price as $96 million and the seller as Sucia Scottsdale LLC.
Under the purchase agreements, the partner’s interest in the land, ground lease and in the joint venture will be conveyed to Glimcher subsidiaries. The third phase may be developed by Glimcher for retail, hotel, office and/or residential use.
Glimcher expects to fund the acquisition through approximately $85 million of mortgage debt with the remainder to be funded through availability under its credit facility. The purchase of the Phase I and II land is expected to occur in September 2010. The Phase III land purchase along with the termination of the joint venture is expected to close in October 2010.
Excel Trust Provides Details on $157M in Deals
Excel Trust Inc., a San Diego-based retail REIT, has acquired two properties for $54.6 million and signed purchase contracts to acquire five properties for $102 million. Since its initial public offering, Excel Trust has grown its portfolio to a gross asset value of approximately $226.5 million, not including properties under contract.
Excel Trust purchased the 375,871-square-foot Vestavia Hills City Center in Birmingham, Ala., on August 30 for approximately $33.5 million at an approximate cap rate of 10.3 percent. Built in 2002, the property is anchored by Publix, Stein Mart, Dollar Tree and Rave Movie Theaters.
The firm purchased the 163,774-square-foot Grant Creek Town Center in Missoula, Mont., on August 27 for approximately $21.3 million at an approximate cap rate of 8.5 percent. Built in 2002, the property is anchored by Ross Dress for Less, REI and TJ Maxx.
In addition, the firm signed a purchase contract to acquire the 197,884-square-foot Brandywine Crossing in Brandywine, Md., and the 116,008-square-foot Rosewick Crossing in La Plata, Md., for $70 million at an approximate cap rate of 7.5 percent.
Excel Trust also signed purchase contracts to acquire the 78,660-square-foot Shops of Foxwood in Ocala, Fla., for $14.5 million at a cap rate north of 8 percent, the 47,000-square-foot Settler’s Market at New Town in Williamsburg, Va., for $13.5 million and a Walgreens in Princeton, W.Va., for $4 million.
Forest City Lines up $85M Financing for New York Property
A subsidiary of Forest City Enterprises Inc. closed a 10-year, $85.0 million, fixed-rate mortgage loan for its 42nd Street entertainment retail property in New York City. The new financing is at an interest rate more than 325 basis points lower than that of the loan it replaces.
The financing "demonstrates the improving conditions in the credit markets, where financing is increasingly available at attractive rates for high-quality operating properties in good markets," Forest City President and CEO Charles A. Ratner said in a statement.
The 312,000-square-foot 42nd Street retail and entertainment complex is located in the heart of New York City's Times Square district. Tenants include AMC Theatres, Madame Tussaud's Wax Museum, Modell's, and Dave and Buster's.
Equity One Acquires Three Shopping Centers in Florida
Equity One Inc. acquired three shopping centers in Florida for an aggregate purchase price of $64.7 million.
Two centers, the 100,229-square-foot Country Walk Plaza and the 99,864-square-foot Westbird Plaza, are located in Miami Dade-County. The third center, the 151,238-square-foot Pablo Plaza, is located in Jacksonville.
Country Walk Plaza was acquired for approximately $27.8 million. The center is currently 96 percent leased and is anchored by a Publix supermarket and a CVS. Westbird Plaza was acquired for $17.6 million. It is currently 94 percent leased and also anchored by a Publix and a CVS. Pablo Plaza was acquired for $19.3 million. The center is currently 88 percent leased and is anchored by Marshalls, HomeGoods, and Office Depot.
HFF Arranges Quartet of Deals
Holliday Fenoglio Fowler L.P. (HFF) announced it arranged three financings worth approximately $50 million and the sale of a center in Alabama for an undisclosed price.
The Dallas office of HFF secured $39 million in financing for the 287,000-square-foot Huebner Oaks power center in northwest San Antonio.
Working on behalf of Inland Western REIT, HFF managing director Kevin MacKenzie placed the five-year, fixed-rate loan with Nationwide Life Insurance Co.
Huebner Oaks is 95 percent leased to tenants including Bed Bath & Beyond, Borders, Ross Dress for Less, Old Navy, Starbucks, The Gap, Banana Republic and Macaroni Grill.
In a second deal, HFF’s Boston office arranged a $15 million financing for a 69,733-square-foot, free-standing Stop & Shop in Stamford, Conn.
HFF senior managing director Dana Brome worked on behalf of the borrower, Cole Real Estate Investments, to secure the seven-year, fixed-rate loan through Farmington Bank. The term loan is interest-only for the first three years and on a 30-year amortization thereafter until maturity in 2017. The loan was priced as a floating-rate of 1-month LIBOR plus 200 bps. The loan rate was swapped to fixed, at a rate of 4.31 percent.
In addition, HFF’s Houston office arranged a $4.8 million refinancing for the 26,355-square-foot West University Corner, a Walgreen’s-anchored retail center in the West University area of Houston.
HFF associate director Colby Mueck worked on behalf of New Tuscany Development Ltd. to secure the 15-year, fixed-rate loan through Nationwide Life Insurance Co.. The financing retired a maturing CMBS loan.
Lastly, HFF’s Dallas and Atlanta offices closed the sale of the 115,282-square-foot Cahaba Village grocery-anchored shopping center in Mountain Brook, Ala.
HFF senior managing director Barry Brown, managing director Ryan Shore and director Jim Hamilton led the investment sales team on behalf of the seller, Bayer Properties. The property was purchased by ING Clarion Partners on behalf of an institutional investor for an undisclosed amount free and clear of debt. Bayer Properties will continue to manage and lease Cahaba Village.
Completed in 2007, the property is 98 percent leased to tenants including Whole Foods, Charles Schwab, FedEx Office, LensCrafters, Diamonds Direct and Mountain High Outfitters.
Jones Lang to Manage Meadowlands Xanadu
In an effort to accelerate completion of the Meadowlands Xanadu entertainment and retail complex, the consortium of lenders that recently acquired control of the asset, retained Jones Lang LaSalle as the exclusive asset and property management firm for the complex.
In this role, Jones Lang LaSalle will oversee all asset management services as the lender group continues negotiations with several entertainment and retail operators to expedite completion of the project. Jones Lang LaSalle's duties include strategy execution, property management, development advisory and institutional reporting.
The Jones Lang LaSalle team leading Xanadu asset management includes managing directors Jere Lucey, Daniel St. Clair and Karen Raquet. Jones Lang LaSalle is joined by the local development team for the project, lead by Joseph Calascibetta, Peter Sjolund and Kevin Neuner.
Other Notable Deals
Stirling Properties closed a $20.3 million fixed-rate permanent loan for the 295,000-square-foot Premier Centre in Covington, La. This new loan pays off the maturing 10-year loan from Deutsche Bank secured in September of 2000. Jeff Marshall, senior vice President of development and acquisitions for Stirling Properties, placed the deal with Prudential Commercial Mortgage on behalf of its client Premier Centre LLC.
The retail sales acquisition team at CPEX Real Estate arranged for the purchase of 1760 Eastern Parkway, Brooklyn, N.Y. An urban opportunity fund bought the 14,000-square-foot freestanding building for $1.6 million, which constituted a price per square foot price of $117.64 and the cap rate was 5.53 percent. Kalmon Dolgin was the co-broker in this transaction.
Terri J. Cox, director of sales and leasing at Matanky Realty Group Inc. represented the seller of 5001 Melrose LLC, a 27,466-square-foot building that was formerly a Wickes Furniture and has been converted to a new Cermak Produce Grocery Store. Terri J. Cox represented the seller. Dino Geroulis represented the buyer.