The locally based public company is in the process of selling 90% of its ownership interest in 51 power and community centers to Galileo America REIT for total consideration of $516 million. The $355-million first phase of the transaction, which closed in October, transferred 90% ownership of 41 centers to the new REIT.

In this latest closing, CBL sold to the joint venture six power and community centers for total consideration of approximately $92.4 million. CBL received approximately $62.7 million after closing costs and retirement of debt. The joint venture assumed approximately $2.8 million of existing debt on one of the properties, and CBL retired $25.9 million in debt associated with one property. The six properties generated net operating income of approximately $4.2 million in 2003. One of the six properties, opened in October 2003, was in operation for the last three months of the year.

When all three transactions are complete, Galileo America REIT will have assumed about $99 million of existing debt on 10 of the properties and CBL will have retired $53 million in loans associated with two properties. Galileo America REIT will obtain additional debt financing of approximately $160 million at the closing of the first two phases. Net cash proceeds to CBL from all three phases are expected to total approximately $387 million, Total gains for CBL on a GAAP basis will be $99 million, but the taxable gain should be much less, as the company plans to reinvest net proceeds in new developments, future mall acquisitions and other retail real estate opportunities.