COLUMBUS, OH—Washington Prime Group has entered its second joint venture in as many years with O'Connor Capital Partners. The JV gives O'Connor affiliate O'Connor Mall Partners a 49% interest in seven of Washington Prime's open-air shopping centers, with the REIT retaining a 51% non-controlling interest.
Washington Prime will continue leasing and managing the properties, which are valued at about $600 million. The company expects net proceeds of approximately $350 million after taking into account the assumption of existing debt on the properties and new debt to be placed on the assets that are currently unencumbered. Net proceeds will be used to reduce the REIT's outstanding debt, as well as for general corporate purposes.
The seven properties in the joint venture will be Arbor Hills in Ann Arbor, MI; Classen Curve/Nichols Hills Plaza/The Triangle at Classen Curve in Oklahoma City; Malibu Lumber Yard in Malibu, CA; Palms Crossing in McAllen, TX; and three properties in Austin, TX: Gateway Center, the Arboretum and The Shops at Arbor Walk. Pricing on the JV implies a cap rate in the low-5% range on in-place NOI.
Wilkie Farr & Gallagher is providing legal counsel to Washington Prime, while Neal, Gerber & Eisenberg LLP is serving as legal advisor to O'Connor. The JV is expected to close in the first quarter of 2017.
In February of 2015, Washington Prime and the O'Connor affiliate announced a $1.625-billion JV on five geographically diverse shopping centers totaling approximately 3.3 million square feet, not including tenant-owned space. The partnership, which closed the following summer, covers the Mall at Johnson City in Johnson City, TN; Pearlridge Center in Aiea, HI; Polaris Fashion Place in Columbus, OH; Scottsdale Quarter in Scottsdale, AZ; and Town Center Plaza in Leawood, KS.
The REIT's announcement of its latest JV with O'Connor came as part of its third-quarter earnings report. Funds from operations for the quarter were $100.8 million, or $0.46 per diluted share. This compares to $98.5 million, or $0.45 per diluted share, during the same quarter a year ago.
COLUMBUS, OH—Washington Prime Group has entered its second joint venture in as many years with O'Connor Capital Partners. The JV gives O'Connor affiliate O'Connor Mall Partners a 49% interest in seven of Washington Prime's open-air shopping centers, with the REIT retaining a 51% non-controlling interest.
Washington Prime will continue leasing and managing the properties, which are valued at about $600 million. The company expects net proceeds of approximately $350 million after taking into account the assumption of existing debt on the properties and new debt to be placed on the assets that are currently unencumbered. Net proceeds will be used to reduce the REIT's outstanding debt, as well as for general corporate purposes.
The seven properties in the joint venture will be Arbor Hills in Ann Arbor, MI; Classen Curve/Nichols Hills Plaza/The Triangle at Classen Curve in Oklahoma City; Malibu Lumber Yard in Malibu, CA; Palms Crossing in McAllen, TX; and three properties in Austin, TX: Gateway Center, the Arboretum and The Shops at Arbor Walk. Pricing on the JV implies a cap rate in the low-5% range on in-place NOI.
In February of 2015, Washington Prime and the O'Connor affiliate announced a $1.625-billion JV on five geographically diverse shopping centers totaling approximately 3.3 million square feet, not including tenant-owned space. The partnership, which closed the following summer, covers the Mall at Johnson City in Johnson City, TN; Pearlridge Center in Aiea, HI; Polaris Fashion Place in Columbus, OH; Scottsdale Quarter in Scottsdale, AZ; and Town Center Plaza in Leawood, KS.
The REIT's announcement of its latest JV with O'Connor came as part of its third-quarter earnings report. Funds from operations for the quarter were $100.8 million, or $0.46 per diluted share. This compares to $98.5 million, or $0.45 per diluted share, during the same quarter a year ago.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
