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Realty Income Conducts Offering to Fund Acquisitions

Realty Income Corp. conducted a public offering of 7.5 million shares priced at $34.81 per share. Net proceeds from the offering, after underwriting discounts and estimated offering expenses payable by the company, will be approximately $248.3 million. The offering was upsized from an original amount of 6 million shares. The firm also granted the underwriters a 30-day option to purchase up to 1.125 million additional shares of common stock to cover overallotments, if any.

The net proceeds from the offering are expected to be used to fund recently announced property acquisitions that are expected to close during the first six months of 2011. Any remaining net proceeds will be used for general corporate purposes and working capital, which may include additional acquisitions.

All of the shares are being sold by the company. The underwriters for the offering are: BofA Merrill Lynch and Wells Fargo Securities (joint book-running managers), Morgan Stanley, RBC Capital Markets, Raymond James and UBS Investment Bank (co-lead managers), BB&T Capital Markets, Citi, Credit Suisse, J.P. Morgan, Janney Montgomery Scott, Morgan Keegan, Stifel Nicolaus Weisel, (senior co-managers) and BNY Mellon Capital Markets LLC (co-manager).

Sembler Trades Boynton Town Center for $59M

CB Richard Ellis (CBRE) represented an affiliate of the Sembler Co. in the sale of Boynton Town Center in Boynton Beach, Fla.

The center is anchored by SuperTarget, Best Buy, Total Wine and Michael's. Additional national and regional tenants include Shoe Carnival, Jos. A Banks, GameStop, Sweet Tomatoes, 5 Guys Burgers, Massage Envy and LensCrafters. The property was acquired by Canada-based Morguard Investments Limited. CBRE's Florida national retail investment group exclusively represented the seller.

Boynton Town Center opened in late 2007. The 202,000-square-foot sale excluded SuperTarget. The premier shopping center is part of a larger development approved for 1,100 residential units. The residential land parcels were not included in the sale.

Macerich Buys Rest of Desert Sky Mall

Macerich announced the purchase of the remaining 50 percent ownership stake in Desert Sky Mall from J.C. Penney Co.'s JCP Realty.

The total purchase price was $27.6 million which included the assumption of a pro rata share of the property debt. Concurrent with the purchase of the partnership interest, the $51.5 million loan on the property was paid off.

Desert Sky Mall is a 900,000-square-foot indoor shopping center located in West Phoenix that features a unique merchandise mix geared toward Hispanic consumers. Key retailers include La Curacao, a Latin-focused department store, and Cinema Latino, a multi-screen theater complex, plus Sears, Dillard's and Burlington Coat Factory.

Further customizing the merchandise mix at Desert Sky Mall to the area's Hispanic consumer, Macerich in December launched a Mercado concept in the former Mervyns space. Called Mercado de los Cielos, the new Latin marketplace has room for more than 200 small spaces for tenants ranging from beauty salons to carnicerias, or meat markets, flower shops, bakeries and many other retail businesses with proven appeal to the targeted market.

Black Oaks Buys Hastings Marketplace

Black Oak Associates Inc. has purchased the 93,000-square-foot Hastings Marketplace shopping center in Manassas, Va., for $18.1 million.

The recently constructed property is anchored by a 56,000 square foot Harris Teeter Food Market and Pharmacy, which opened in October 2010. The acquisition is the second purchase by Black Oak in the past four months.

The center is currently 73 percent leased and in addition to Harris Teeter is occupied by tenants including Bank of America, Verizon Wireless and Neibauer Dental Care. Black Oak Associates is working with Rappaport Retail Brokerage, the exclusive leasing representative for the property, to complete the lease up of the available 25,000 square feet.

Inland Real Estate Acquisitions Buys Waxahachie Crossing

Inland Real Estate Acquisitions Inc. announced the acquisition of the 97,011-square-foot Waxahachie Crossing shopping center in Waxahachie, Texas for approximately $15.5 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.

The property was constructed in 2009 and tenants include Best Buy, Ross Dress for Less, PetSmart, Famous Footwear, Maurices and an AT&T cellular store. The shopping center was more than 96 percent occupied at closing and is shadow-anchored by a Home Depot and a JC Penney, which were not acquired by Inland Real Estate Acquisitions.

Other Notable Deals

Andrew Stewart and Anna Westhoff of Cronheim Mortgage arranged permanent acquisition financing of $9 million for a redeveloped 168,803-square-foot Lowe's-anchored retail center located in Derby, Conn. The 19-year self-liquidating loan term features an interest rate of 4.85 percent. The loan was placed with a correspondent of Cronheim, which will service the loan.

The commercial real estate group of Washington Trust recently provided $6.85 million to CT Properties LLC, for the refinancing of the 97,202-square-foot Colony Shopping Plaza in Wallingford, Conn. The center is anchored by Staples and the Dollar Tree, as well as several other local businesses.

Faris Lee Investments completed the sale of a 14,820-square-foot retail property occupied by Walgreens for $5.21 million in Stockton, Calif., Built in 2008 and situated on just under 1.5 acres, the property is leased to Walgreens on a long-term, absolute triple-net lease with 72 years remaining on the lease term. Jeff Conover, senior managing director of Faris Lee Investments, represented the seller, West Hammer Properties from San Juan Capistrano, Calif. The all-cash buyer, a family trust from Gilroy who was in a 1033 exchange, was represented by Kevin Cunningham with Cornish & Carey. The property closed at a 6.5 percent cap rate.

Faris Lee also completed the $5.4 million sale of the 88,075-square-foot Garden Lakes Centre in Phoenix. The center is 83 percent occupied and includes two anchor tenants, Savers and Dollar General. David Wetta and Joe Compagno, managing directors in Faris Lee’s Phoenix office, represented the buyer in the transaction, Ethan Christopher, a private investor from Encino, Calif. CBRE represented the real estate-owned bank seller, Sterling Savings Bank out of Spokane, Wash.

KLNB Retail Investment Sales has brokered the sale of the 24,000-square-foot Shoppes at Gateway Plaza in Columbia, Md. Gil Neuman of KLNB Retail Investment Sales represented the seller, Sanford Gateway LLC, an affiliate of Stanford Properties LLC. Rick Porter of Goldstone Realty represented the buyer, Columbia Gateway Plaza LLC. The sale price was $3.5 million or $148 per square foot. The retail center contain ten tenants and is currently 87 percent leased.

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