Four of the properties are in Ohio and the rest are in five other states. In all, the deal will add 9.7 million sf of retail space to Westfield's current $5.7 billion portfolio of retail properties in the US.
The largest of the properties involved in the sale is Southpark Center, a 1.35-million-sf mall in the Cleveland suburb of Strongsville. Jeff Linton, a Jacobs Group spokesman, tells GlobeSt.com. Other properties include the 1.3-million-sf Chesterfield Mall in Chesterfield, MO; the 1.27-million-sf Southcenter complex in Seattle; and the 1-million-sf Gateway in Lincoln, NE.
Westfield America Inc. is the US arm of Westfield, an Australian company that already owns all or part of 39 malls across North America. Terms of the agreement call for Westfield to pay Jacobs Group $40 million (US) in cash and $210 million in stock. Westfield also will assume $506 million in non-recourse debt.
Jacobs Group was co-founded by developer Richard E. Jacobs and his brother, David, in 1955. David Jacobs died several years ago, but Richard Jacobs went on to grow the company's portfolio to about 45 million sf of retail, office and hotel space.
A noted philanthropist, Richard Jacobs also bought the Cleveland Indians baseball team in 1986 and slowly converted the franchise from a league laughingstock into one of the sport's most successful and profitable teams before selling it last year. The success of both the Indians and Jacobs' real estate and philanthropic projects helped the city itself regain respectability after years of slow decay.
The portfolio sale to Westfield "is really just a continuation of a plan Jacobs [Group] announced about two years ago to begin selling off its holdings as part of Richard Jacobs' estate planning," company spokesman Linton says.
Peter Lowy, Westfield America's managing director, suggests that the deal is a "value-added" play for his company. The average occupancy of the Jacobs Group properties involved in the transaction is 87%, well below the 94% occupancy of Westfield America's current portfolio.
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