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General Growth, Pensions Pay $276M for Malls

CHICAGO-Two malls in the Houston market and a third in Florence, KY are acquired in joint ventures with the New York state and Illinois teachers' pension funds. General Growth Properties Inc.'s property management firm is in place at two of the assets.

By Mark Ruda | Updated on December 20, 2002

CHICAGO-Present and future pensioners in two states have seen another 3.2 million sf added to their portfolios. General Growth Properties Inc. has acquired three malls in Kentucky and the Houston market in joint ventures with state pension funds here and in New York, paying $276 million.

The malls generate about $24 million in net operating income, according to the No. 2 retail REIT in the US, meaning the properties were acquired at a combined 8.7% overall capitalization rate.

A 50/50 joint venture with the New York State Common Retirement Fund acquired the remaining 50% interest in 1.2-million-sf The Woodlands Mall in Houston, where sales run about $400 per sf. Dillard’s, Foley’s, JCPenney, Mervyn’s and Sears anchor the mall, which was 96% occupied when The Woodlands Commercial Property Company, LP sold its 50% interest.

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