The debt portion of the acquisition is an existing mortgage, which originated in 1998 and matures onSeptember 11, 2008. The debt bears interest at a fixed rate of 8.50% and is based on a 30-year principal amortization schedule.
Glimcher says the $51-million purchase price represents an approximate capitalization rate of 12% based on current net operating income.
"This acquisition is in keeping with our strategy of redeploying a portion of the proceeds from community center asset sales into new investments in regional malls," says Glimcher President Michael Glimcher. "With this latest transaction, we now have 100% ownership of 22 of our 23 regional malls."
Glimcher is pursuing a strategy of selling single tenant and non-strategic community center assets and focusing on the mall portfolio. Net proceeds from asset sales will most likely be applied to reduce debt and to fund additional investments in regional mall properties.
During the first six months of 2003, the Company sold three community centers for $13.3 million and acquired the remaining 50% ownership interest in Colonial Park Mall, a mall in Harrisburg, PA, for $34.3 million in existing mortgage notes, $5.5 million in cash and the assumption of net assets and liabilities.
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