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TIAA-CREF, CBL Close $1.1B Joint Venture

TIAA-CREF and CBL & Associates Properties Inc. announced the closing of a $1.09 billion real estate joint venture that the firms announced in May.

TIAA-CREF has completed its investment in four of CBL’s shopping malls: Oak Park Mall in Kansas City, Kan., West County Center in St. Louis, Mo., CoolSprings Galleria in Nashville, Tenn. and Pearland Town Center in Pearland, Texas.

“With the ongoing disconnect in public versus private market valuations, we believe this transaction provides us with the most advantageous source of monetizing the equity value in our portfolio,” CBL President & CEO Stephen Lebovitz said. “TIAA-CREF’s investment strengthens our balance sheet and partners us with a well-capitalized institution to pursue new opportunities.”

The transaction fits into a pattern of late. Earlier in the year, many REIT managers voiced desires to dispose of non-core assets and focus on their strongest properties. Fellow regional mall ownersWestfield, General Growth Properties and Simon Property Group all talked of selling assets and Westfield has been shopping a portfolio for months, but has yet to announce a deal. General Growth eventually spun off a portfolio into Rouse Properties Inc.

TIAA-CREF has $17 billion of primarily high-quality properties in the office, retail, industrial and multifamily sectors across the U.S., Canada, and Western Europe.

“We believe dominant regional malls are an important part of a well-diversified real estate portfolio, and this investment alongside CBL allows us to expand our presence in this sector,” said Philip McAndrews, managing director and head of global real estate transactions and joint ventures, TIAA-CREF. “This investment in super regional malls with CBL is part of our strategy to invest in assets that provide durable income streams with enduring long term values.”

TIAA-CREF received a 50 percent pari passu interest in the three enclosed malls, including Oak Park Mall, West County Center and CoolSprings Galleria, and a 12 percent interest in Pearland Town Center. In total, CBL reduced outstanding debt balances by approximately $486 million through TIAA-CREF’s assumption of approximately $267 million of property-specific debt and cash proceeds of approximately $219 million. CBL continues to manage and lease the properties.

Eastdil Secured acted as CBL’s exclusive financial advisor in arranging this joint venture.

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