Joint Venture Buys Monmouth Mall for $164.7M

EATONTOWN, NJ-A joint venture of Vornado Realty Trust, the Kushner Cos. and Ashkenazy Investment Co. will plunk down $164.7 million to buy the 1.5 million-sf Monmouth Mall, a super-regional enclosed shopping complex here. The seller is Equity Properties and Development Co. of Chicago, owner of the 42-year-old property since 1977.

Under the partnership arrangement, Paramus, NJ-based Vornado will take a 50% interest and be the managing partner, with Florham Park, NJ-based Kushner and New York-based Ashkenazy splitting the rest. According to a statement issued by Vornado, it has made a $7 million equity investment in the venture and has also provided it with $23.5 million of preferred equity yielding 14%. The rest of the purchase price is being financed by the partnership with floating rate debt with a three-year term and two one-year extensions.

Opened in early 1960 as an open mall by now-defunct Arlen Shopping Centers, the 90-acre complex at the intersection of Routes 35 and 36 underwent a major expansion and was partially enclosed in 1975, adding a second level. Equity substantially renovated it in 1996, completing its enclosure, adding a food court and 77,000-sf, 15-screen Loews Multiplex Theater, and taking advantage of a significant lease roll-over to make the tenant mix more upscale.