547,000-SF Arkansas Mall Trades Hands

LITTLE ROCK, AR-The 547,000-sf Park Plaza Mall here changed publicly traded hands this week. CBL & Associates Properties Inc. acquired the 82%-leased mall from First Union Real Estate Equity and Mortgage Investments for $46.1 million in cash and $41.3 million in non-recourse debt that carries an interest rate of about 8.7% and matures in 2010. The actual purchase price was $77.5 million, but CBL says it will immediately invest another $9.9 million in upgrades. The mall had average shop sales of $406 per sf in 2003. Based on current income and including the additional investment, CBL expects the asset to generate an initial yield of just under 8.5%.Originally built in 1959, Park Plaza Mall underwent a redevelopment in 1988 that transformed the open-air center into an enclosed regional mall. The three-level mall is located on 22.5 acres at the intersection of two major thoroughfares, Markham Street and University Avenue, less than one half mile from I-630. Park Plaza is CBL’s first regional mall in the state of Arkansas. CBL president Stephen Lebovitz says his company will strengthen the mall’s already successful retailer lineup by raising the occupancy levels and investing in capital improvements. Locally headquartered Dillard’s anchors the mall with two department stores. It has a 198,000-sf store on the west and an 86,300-sf location on the east side of the center.