Two Regional Malls Fetch $202M

CHATTANOOGA, TN-Publicly traded CBL & Associates Properties Inc. has acquired two regional malls from entities advised by Charlotte, NC-based Faison & Associates LLC for $202 million in cash and debt. The properties are the 1.06 million-sf Volusia Mall in Daytona Beach, FL and the 681,000-sf Honey Creek Mall in Terre Haute, IN. Both properties have an occupancy percentage in the high 80s and, based on current incomes, are expected to generate initial yields in the mid-to-high 7% range.

“They both dominate their respective markets with prominent locations, a solid lineup of department store anchors and strong mall shop sales,” says CBL chairman/CEO Charles Lebovitz. “The favorable sales and occupancy trends at each mall, attractive re-merchandising and specialty income opportunities, and potential upside from new and renewal leasing offered compelling reasons for pursuing these acquisitions.”

The Volusia Mall is currently 89.4% occupied with average mall shop sales of $368 per sf in 2003. Anchor tenants include Burdines, Dillards, JCPenney and Sears. The mall is located 1.5 miles east of I-95, across the street from the Daytona International Speedway and Daytona International Airport. The nearest competing mall is about 30 miles away. CBL says the asset is expected to generate an initial yield of 7.64%.