Prime Retail Sells Hagerstown Center Stake for $23.5 Million

HAGERSTOWN, MD- Focusing on its goal of paying down debt, Baltimore, MD-based real estate investment trust Prime Retail, Inc. has sold 70% of its interest in the Hagerstown Center–also referred to as Prime Outlets at Hagerstown–for $23.5 million to an Estein & Associates USA, Ltd. affiliate. The 487,000-sf center is nearly 100% occupied. The deal allows Prime Retail to pay down $12.1 million on the $90 million mezzanine loan attained in late 2000 from Fortress Investment Fund LLC and Capital Financial Products, Inc. Prime Retail now owes just $49 million on the loan.

“One of the key reasons why now is a good time [to sell the interest], and one of the key reasons why we did it, is because the lender agreed to an assignment of the debt to the new partnership,” Prime Retail’s Steven A. Sless shares with GlobeSt.com. “This is a positive because the interest rate is 3.37%, and that’s good for us because the venture is then obligated to pay the difference.”