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Macerich, General Growth Announce Property Swap and Cash Deal

The Macerich Co. and General Growth Properties Inc. announced a deal for the sale to Macerich of General Growth's one-third ownership interest of Superstition Springs Mall and Arrowhead Towne Center, both in the Phoenix market, together with the purchase of six big-box anchor locations in Arizona, California, Illinois and Utah for a net of $75 million in cash to General Growth.

"The success of these two properties can be attributed to Macerich's hands-on partnership over the years. This is an opportunity for both companies," General Growth CEO Sandeep Mathrani said in a statement. "This deal not only provides GGP with additional capital to either pay off debt or reinvest in our properties, it also helps us further solidify our focus on our core assets. We are now in possession of six high profile anchor locations that will add to GGP's bottom line and provide further value for our shareholders."

"I totally concur with Sandeep's understanding of the importance of owning the anchors and their parking fields in one's valuable malls as it gives an owner great redevelopment flexibility,” added Macerich Chairman and CEO Arthur Coppola in a statement. “This is a transaction that has been a natural conversation for over 3 years and we are pleased that with the new leadership team in place at GGP that it has resulted in an exchange that is good for both GGP and MAC."

The six big-box anchor locations include:

  • Neiman Marcus at Oakbrook Center in Chicago
  • Burlington Coat Factory at Chula Vista Center in San Diego
  • Forever 21 at Tucson Mall in Tucson, Ariz.
  • Kohl's at Southland Mall in Hayward, Calif.
  • Former vacant Mervyn's locations at Fallbrook Mall in Fallbrook, Calif., and Newgate Mall in Ogden, Utah

The two malls involved in the exchange average over $430 per square foot in sales, are over 95 percent occupied and are anchored by Dillard's, J.C. Penney, Macy's and Sears.

In a separate transaction, Coyote Management L.P. and Garrison Investment Group, through their affiliates have acquired the 1.2-million-square-foot Chapel Hills Mall in Colorado Springs, Colorado, from General Growth for an undisclosed price.

Chapel Hills Mall has six anchors, Dillard’s, JCPenney, Macy’s, Sears, Dicks Sporting Goods and Burlington Coat Factory, a 15-screen Carmike Cinema and over 100 specialty stores.

“The acquisition of Chapel Hills Mall along with Central Mall acquired in December and the portfolio acquired in September comprising of six properties, has established for our partnership a new corporate platform,” Coyote Chairman and CEO Michael Rulli said in a statement. “We are very enthused with the momentum and direction of our company and look forward to increasing ownership of assets like these over the near term.”

Tanger Close $150M Senior Unsecured Bridge Facility

Tanger Factory Outlet Centers Inc. executed a commitment letter for a $150 million senior unsecured bridge facility with Wells Fargo Bank N.A.. The facility may be used to fund the acquisition of properties and for general corporate purposes and will bear interest at a spread over LIBOR of 160 basis points, based on the Tanger's current long-term debt rating.

Pending the preparation and execution of loan documentation and other customary closing conditions, Tanger may advance under the facility through August 1, 2011, with maturity 90 days after funding.

At its discretion, the company has three 90 day extension options. The terms of the bridge facility will be substantially the same as the company's lines of credit.

RED Development Strengthens Relationship with Institutional Partner

RED Development LLC enhanced its relationship with its long-term institutional capital partner, advised by CDK Realty Advisors.

RED and CDK’s unnamed client have formed RED Consolidated Holdings LLC, a real estate holding company that owns 22 properties totaling more than nine million square feet in twelve states. This new venture consolidates real estate development projects owned by the parties with the operating companies of RED which will provide the venture with greater access to capital and new opportunities.

Since the relationship with RED began in 1999, CDK on behalf of its client has invested $280 million in select RED development projects including: CityScape in Phoenix, Village Point in Omaha, Neb., and Summit Fair in Lee’s Summit, Mo. CDK and RED continue to develop certain projects under the original 50/50 development joint venture.

Newly-formed RED Consolidated Holdings LLC continues to operate as a private company with a new emphasis on its stabilized retail projects and acquisition of assets where value can be created using RED’s experience in repositioning assets. RED has acquired three new assets for RED Consolidated Holdings: Woodbury Lakes, Beach Village and Aspen Place as part of this new strategy.

HFF Secures Series of Financings

HFF announced several large transactions last week on individual retail properties and portfolios that included some retail assets.

In the largest deal, HFF secured $134.76 million in financing for a 13-property mixed-use portfolio totaling 2.8 million square feet throughout the United States. The HFF team representing McMorgan included John Pelusi, executive managing director, Mike Tepedino and Trey Morsbach, senior managing directors, and Todd Newman, real estate analyst.

HFF worked on behalf of McMorgan & Co. LLC to secure the fixed-rate financing through a life insurance company. The loan is cross collateralized by all 13 properties and is tranched into three, five-, seven-, and ten-year terms. The portfolio includes industrial, office, multi-housing and retail properties located in eight states. Overall, the portfolio is 90 percent occupied.

In a separate deal, HFF arranged an $80 million refinancing for Cityview Plaza, a nine-building, Class A office and retail complex totaling 602,972 square feet in downtown San Jose, Calif.

HFF worked on behalf of the borrower, an affiliate of BPG Properties Ltd., to secure the five-year, fixed-rate loan through J.P. Morgan Chase Bank N.A. Loan proceeds are replacing maturing debt on the property. The HFF team representing the owner was led by Managing Director Steve Gunther.

Major tenants of Cityview Plaza include Bank of America, URS Corporation, Overland Storage, Heritage Bank of Commerce and Morton’s Steakhouse. Presently, the property is 84 percent leased.

In a third deal, HFF arranged a $60 million refinancing for Seminole Towne Center, an enclosed regional mall in Sanford, Fla. The HFF team representing the borrower included John Pelusi, executive managing director, Claudia Steeb, managing director and Luis Castillo, director.

HFF worked on behalf of the borrower, Seminole Towne Center L.P., to secure the 10-year, fixed-rate loan through Citigroup Global Markets Inc. The securitized CMBS loan is replacing maturing debt on the property and will be serviced by HFF. Seminole Towne Center L.P. includes a Simon Property Group entity and an institutional investor advised by Heitman.

Seminole Towne Center was developed in 1995, the property is anchored by Dillard’s, JC Penney, Macy’s, Sears and a 10-screen United Artists Theatre.

In a fourth deal, closed the sale of Promenades, a 230,704-square-foot, grocery-anchored community center with a medical office component in Port Charlotte, Florida. The property was renovated in 2009 and is 87 percent leased to tenants including Winn-Dixie, Bealls Outlet, Fawcett Memorial Hospital supplemental care services and YouFit, among others.

HFF marketed the property on behalf of the seller, Edens & Avant. In-Rel Properties Inc. purchased the property for an undisclosed price. The HFF team representing the seller was led by Managing Director Danny Finkle and Director Luis Castillo.

Acadia Provides Updates on Acquisitions and Dispositions

Acadia Realty Trust announced that it has disposed of a $37.0 million non-strategic enclosed mall within its core portfolio and reinvested a portion of its sale proceeds in the acquisition of a $28.4 million urban/street-retail asset.

Last month, Acadia sold the unencumbered 517,000-square foot Ledgewood Mall in Ledgewood, N.J., for $37.0 million. At disposition, this wholly-owned property–the company’s last remaining enclosed asset from the Mark Centers Trust transaction–was 79 percent leased and held for redevelopment within the core portfolio.

The company subsequently acquired a 44,000-square-foot urban/street-retail asset for $28.4 million. The newly-redeveloped property is located at 651-671 West Diversey Parkway in Chicago’s Lincoln Park/Lakeview neighborhood and is 100 pecent leased to tenants including Trader Joe’s, Urban Outfitters and Express.

It was Acadia’s second acquisition this year in Chicago’s Central/North Side market. In April, the company, through its Fund III, acquired The Heritage Shops at Millennium Park, a 105,000-square-foot property anchored by LA Fitness and Ann Taylor Loft.

Additionally, the firm has entered into a contract to acquire a second replacement property for the Ledgewood Mall, which would fully-complete the tax-deferred exchange initiated by its sale.

Private Investor Buys Three Illinois Walgreens

Marcus & Millichap Real Estate Investment Services negotiated the sale of three Walgreens located throughout the state of Illinois. This portfolio commanded a price of $15,184,137.

John P. Nuzman, a vice president investments in Marcus & Millichap’s Detroit office, represented the seller, a limited liability company. David E. Thurston, an associate vice president investments in the firm’s New Jersey office, represented the buyer, a private investor. John Przybyla, first vice president in the Chicago Downtown office, also provided representation in this transaction.

In addition, Geoffrey Harris, vice president/capital markets in the Phoenix office of Marcus & Millichap Capital Corp., arranged the acquisition financing.

The properties include:

  • 347 E. 95th St., Chicago – This 12,864-square foot Walgreens commanded $5,571,848
  • 35613 State Route 59, Warrenville, Ill. – This 14,589-square foot Walgreens sold for $5,539,296
  • 1080 N. Seventh St., Rochelle, Ill. – This 14,820-square foot Walgreens traded for $4,072,993.

Cogent Group Buys 12 Virginia C-Stores and gas Stations

The Cogent Group acquired of 12 convenience stores and gas stations in the Charlottesville, Va., market.

The properties are leased to Virginia Oil Co., which was founded in 1967 and sells premium fuels under the brands BP, CITGO and Liberty. The stores total approximately 21 acres. The value of these assets is enhanced by fast-food partnerships with McDonald’s, Blimpie and Dairy Queen.

Cogent’s real estate purchase was part of a simultaneous transaction among The Cogent Group, VPS Convenience Store Group (an affiliate of Sun Capital Partners Inc.), and Virginia Oil Company. In conjunction with VPS’s acquisition of Virginia Oil Company, The Cogent Group acquired Virginia Oil’s fee owned properties through a concurrent sale-leaseback transaction. The properties are subject to long-term triple net leases having an initial term of twenty years, plus renewal options.

Inland Acquires Two Assets

Two Inland Real Estate Group of Cos. subsidiaries have announced acquisitions.

In the first deal, Inland Real Estate Corp. announced that its joint venture with PGGM has acquired the 151,840-square-foot Red Top Plaza in the Village of Libertyville, Illinois for $19.8 million, excluding closing costs and adjustments.

Red Top Plaza is anchored by Jewel-Osco and features a mix of national and regional retailers including Fifth Third Bank, Tuesday Morning, Edward Jones, L.A. Tan, Subway, Lou Malnati’s Pizzeria and Hertz, among others.

The venture anticipates placing financing on the asset at leverage levels consistent with its existing business plan. To date, the IRC-PGGM venture has acquired four retail properties aggregating $84.8 million in asset acquisition value.

In a separate deal, Inland Real Estate Acquisitions Inc. acquired a 48,403-square-foot Pick ‘n Save Grocery Store in Burlington, Wis., for approximately $8.1 million. The store is 100 percent leased to Roundy’s Foods through 2029. The property was acquired on behalf of Inland Diversified Real Estate Trust Inc. and the purchase was facilitated by Joe Cosenza, president of Inland Real Estate Acquisitions.

The grocery store is attached to a Kohl’s department store, which was not purchased as part of the transaction. This is the second Roundy’s grocery store Inland Real Estate Acquisitions has acquired on behalf of Inland Diversified Real Estate Trust in 2011. On May 9, the company announced the $6.2 million acquisition of a Roundy’s in Neenah, Wisconsin.

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