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Brookfield and Fairholme Fund Reach Agreement on GGP Shares

Brookfield Asset Management Inc. signed an agreement to acquire 113.3 million common shares in General Growth Properties Inc. from the Fairholme Fund, in a transaction valued at approximately $1.7 billion.

The transaction increases Brookfield's consortium's ownership of General Growth from approximately 27 percent to 38 percent.

Brookfield will issue 27.5 million Class A shares valued at $907 million to Fairholme based on stock market prices and pay $804 million in cash from general corporate sources to acquire the General Growth shares. On completion of the transaction, Fairholme will own a 4.5 percent equity interest in Brookfield.

Fairholme is selling its entire common share holding in General Growth, but continues to own warrants to acquire common shares in General Growth.

"We are pleased to have this opportunity to substantially increase our ownership in General Growth's market dominant portfolio of premier shopping malls at an attractive valuation," Brookfield CEO Bruce Flatt said in a statement. "Fairholme's team provided unwavering support during the recapitalization of General Growth and as one of the top performing mutual fund managers of the last decade, we welcome them as investors in Brookfield."

Fairholme has agreed to certain restrictions on the acquisition of additional shares of Brookfield. Brookfield's purchase of Fairholme's shares in General Growth complies with the agreement entered into at the time of the restructuring of General Growth, which limits the Brookfield consortium's ownership to 45 percent of General Growth.

Cole Closes on $315M Line of Credit

Cole Real Estate Investments, a sponsor of non-traded REITs, announced that Cole Operating Partnership II L.P., the operating partnership of Cole Credit Property Trust II Inc., has closed on a $315 million senior unsecured credit facility with Bank of America N.A. as administrative agent, JP Morgan Chase Bank N.A. as syndication agent, and U.S. Bank N.A. and RBS Citizens N.A. as co-documentation agents. Merrill Lynch, Pierce, Fenner & Smith Inc. and J.P. Morgan Securities LLC served as joint lead arrangers and joint book managers in the transaction. The credit facility replaces an existing $135 million revolving credit agreement.

The credit facility consists of a $100 million term loan and a $215 million revolving credit facility and includes an accordion feature whereby Cole REIT II has the option to increase the maximum borrowings under the credit facility to $450 million, subject to meeting certain conditions. The interest rate for the credit facility ranges from 1.75 percent to 4.0 percent over LIBOR, subject to the Cole REIT II leverage ratio. The credit facility matures in December 2013.

Phillips Edison Completes $289M Financing and Acquires Center

Phillips Edison & Co. has completed a three-year extension on one of its fund's credit facilities. Merrill Lynch, Pierce, Fenner & Smith Inc. is the lead arranger and Bank of America N.A. is the administrative agent on the $289 million secured credit facility including a syndicate of banks.

The credit facility is secured by 64 properties located throughout the U.S. Phillips Edison is a fully-integrated real estate investment fund manager and operator with a portfolio of more than 25 million square feet of community and neighborhood shopping centers across the country.

During the last 18 months, the company has successfully raised or refinanced approximately $409 million of debt and equity through its extensive banking and investor relationships.

In a separate announcement, Phillips Edison’s Fund IV announced the acquisition of the 99,091-square-foot Glidden Crossing Shopping Center in DeKalb, Ill. Chris Labounty of May Center Advisors represented the seller on the transaction.

Construction on Glidden Crossing was completed in 2007. The property features a 58,000 -square-foot Schnuck's grocery anchor, 16,800-square-foot Goodwill, and 23,000 square feet of shop space with several outparcels.

Lastly, Clairvue Capital Partners led a $30 million preferred equity offering of Phillips Edison Shopping Center Fund III. Clairvue contributed $25 million of the total investment and an entity controlled by Phillips Edison contributed the balance.

NorthMarq Capital Arranges $91M Mortgage

Bill Matone, senior vice president of NorthMarq Capital’s Charlotte regional office, arranged first mortgage financing of $91 million for the 562,662-square-foot The Arboretum in Charlotte, N.C.

Major tenants in the center are Walmart and Harris Teeter. Financing was based on a 10-year term with a 30-year amortization schedule and was arranged for the borrower by NorthMarq through its relationship with Wells Fargo Bank N.A.

HFF Arranges $60M Financing for Arrow Retail

The Dallas office of Holliday Fenoglio Fowler L.P. (HFF) announced today that it has arranged nearly $60 million in financing for two retail centers, Deptford Landing in Deptford, N.J. and Eastgate Shopping Center in Memphis, Tenn.

HFF worked exclusively on behalf of Arrow Retail to secure the 10-year fixed-rate loans through BofA Merrill Lynch. Deptford received a $34.02 million loan and a $25 million financing was arranged for Eastgate.

Completed in 2007, Deptford Landing is a 490,910-square-foot retail power center. The 97 percent leased center is occupied by tenants including Wal-Mart, Sam’s Wholesale Club, PetSmart, hhgregg, Michaels, Jared Jewelers, T-Mobile and Five Guys.

Eastgate Shopping Center, which is 91 percent leased, includes 356,020 square feet of retail space plus 89,887 square feet of office space. Retail tenants include Burlington Coat Factory, Stein Mart, Walgreens, TJ Maxx, Michael’s and Fresh Market. The office component is primarily leased to Peabody Hotel Group.

The HFF team that represented Arrow Retail was led by senior managing director Trey Morsbach.

In a separate deal, the Washington, D.C. office of HFF closed the sale of the 63,886-square-foot Metro Pike Center neighborhood retail center and retail pad in Rockville, Md.

HFF senior managing directors Jim Meisel and Dek Potts and executive managing director Stephen Conley led the investment sales team on behalf of the seller, Holladay Corp. Saul Centers purchased the property for $33.25 million with the assumption of a $16 million loan on the property.

Metro Pike Center is located is 87 percent leased to tenants including FedEx Kinko’s, David’s Bridal, Verizon, Domino’s Pizza and McDonald’s.

Cedar Acquires Pennsylvania property

Cedar Shopping Centers Inc. closed on the acquisition of the 487,000-square-foot Colonial Commons in Lower Paxton Township, Pa., for $49.1 million, excluding closing costs and adjustments, and excluding additional potential "earn-out" payments for certain tenancies presently pending. Cedar acquired the property from Centro Properties Group. The price works out to approximately $101 per square foot.

Colonial Commons is currently 93 percent leased and is anchored by Giant Food Stores. Additional tenants include Dick's Sporting Goods, L.A. Fitness, Ross Dress For Less, Marshalls, JoAnn Fabrics and David's Furniture.

At closing, Cedar entered into a first mortgage CMBS loan on the property, arranged by Citigroup Global Markets Realty Corp., in the amount of $28.1 million at 5.55 percent for a 10-year term with amortization on a 27-year schedule. The balance of the purchase price was funded from the company's secured revolving credit facility

Cushman & Wakefield Arranges $41M Long Island Sale

Centro Properties Group sold the 251,222-square-foot DSW Plaza at Lake Grove in Long Island, N.Y., to Prestige Properties for $48 million in a deal arranged by Cushman & Wakefield Inc.

Cushman’s metropolitan area capital markets group, based in East Rutherford, N.J., orchestrated the transaction. Prestige assumed a $27 million loan at an interest-only rate of 4.75 percent.

DSW Plaza is anchored by Toys R Us, DSW Shoe Warehouse, Staples and Michael’s Crafts. Other retailers include Golfsmith, Tuesday Morning, Lenscrafters and a Houlihan’s Restaurant.

M&M Brokers ShopRite Portfolio Sale

Marcus & Millichap Real Estate Investment Services brokered the sale of two ShopRite-anchored shopping centers and one freestanding ShopRite store in upstate New York for $37.1 million.

Steven Siegel, vice president investments and senior director of the firm’s national retail group in Manhattan, represented the seller, a New York-based institutional owner, and the buyer, a New York-based supermarket buyer.

The three properties and their sales prices are:

  • ShopRite Plaza, Warwick, N.Y., $19.4 million, or $242 per square foot
  • ShopRite Plaza, Ellenville, N.Y., $9.1 million, or $161 per square foot
  • Freestanding ShopRite, Hudson, N.Y., $8.6 million, or $143 per square foot

Inland Purchases Chicago Property

Inland Real Estate Corp. announced that its joint venture with PGGM has acquired the 95,354-square-foot Joffco Square in Chicago, Ill., for $23.8 million from River West Plaza-Chicago LLC.

The center is anchored by Best Buy and Bed Bath & Beyond, plus three levels of deck parking. The IRC-PGGM joint venture anticipates placing property-level financing on the asset at leverage levels consistent with its existing business plan.

In a separate deal, Inland Real Estate Acquisitions Inc. acquired the 99,734-square-foot Lima Marketplace shopping center in Fort Wayne, Ind., for approximately $15.2 million. The property was acquired on behalf of Inland Diversified Real Estate Trust Inc. and the purchase was facilitated by Mark Cosenza, vice president of Inland Real Estate Acquisitions.

Major tenants at Lima Marketplace include Aldi, Office Depot, PetSmart and Dollar Tree. The shopping center is shadow-anchored by a Walmart.

Mid-America Negotiates Sale of Chicago Center

Mid-America Real Estate Corp.’s investment sales group announced the recent sale of the 186,349-square-foot Century Shopping Centre in Chicago for $18.5 million to Bon Aviv Investments of Englewood, N.J., a joint venture between two Israel-based companies, Aviv Arion and Bon Investments. Mid-America’s Ben Wineman and Stan Nitzberg were the exclusive representatives of the seller, Century Mall LLC. The buyer was self-represented.

Bally Total Fitness, The Aveda Institute, Landmark Theatres and Victoria’s Secret are among the tenants, with CVS Pharmacy recently signed as a forthcoming anchor.

Other Notable Deals

CB Richard Ellis announce the sale disposition of the 25,200-square-foot Dolly Creek Station by Tampa, Florida-basedArcis Investments Inc. to The Barber Cos for $4.6 million. Dolly Creek Station was built in 1997 and was 100 percent leased at the time of closing in December 2010. Major tenants include Realty South, Richard's BBQ, and Acton Road Pediatrics. Mark Shellabarger, CBRE senior vice president with Tampa, Florida's private client group brokered the transaction on behalf of the owner. Dan Anderson with Engel Realty in Birmingham assisted in the sale and handled leasing of Dolly Creek Station for the seller. Engle Realty also managed the center for the seller.

Voit Real Estate Services’ Gallelli investment team of Sacramento office has completed the sale of the 12,000-square-foot Laguna Corners Retail Shopping Center in Elk Grove, Calif., for a total consideration of $237.50 per square foot, or $2.85 million.

Faris Lee Investments finalized the all-cash $2.1 million sale of the 14,337-square-foot Stoney Creek Retail Center in Highland, Calif. Dennis Vaccaro, senior managing director, and Rich Walter, president, with Faris Lee Investments represented the REO seller, California Bank & Trust, and the buyer, Canoga Park, Calif.-based Infinity Commercial Group LLC.

Cohen & Co’s’s President Helen Putterman and Senior Managing Director Ric Kaiser sold the 303,000-square-foot Watertown Mall in Watertown, S.D., on behalf of a Midwest REIT to a New York investor.

Bianco Properties acquired the 21,330-square-foot Fishers Gateway Shops in Fishers, Ind. Tenants at the center include Starbuck's, Old National Bank, Qdoba and The Running Company.

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