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GGP Pays $312M for Stonestown Mall

SAN FRANCISCO-The 915,000-sf two-level regional mall is 91.7% occupied and producing sales of approximately $475 per sf. GGP reportedly acquired the asset at a 10% premium to the original offering price.

By Brian K. Miller | Updated on August 16, 2004

SAN FRANCISCO-General Growth Properties acquired the 915,000-sf Stonestown retail development here for $312 million. The Chicago-based REIT acquired the property from Heitman, a Chicago-based real estate investment manager.The 915,000-sf two-level regional mall is 91.7% occupied and producing sales of approximately $475 per sf. It was originally developed in 1952. In 1998, it was renovated, expanded and enclosed. Anchor tenants include Macy’s, Nordstrom, and Barnes and Noble. GGP was not immediately available for comment. In a prepared statement, GGP says it funded the acquisition with a combination of cash on hand, borrowing from the company’s credit facilities, and a variable rate loan collateralized by the property. GGP reportedly paid a 10% premium to the original offering price. The investment is said to represent a sub-6% capitalization rate based on in-place numbers. However, GGP should be able to push that percentage through lease-up of available space and the development of 5.3 acres of adjacent land that was included in the sale.General Growth will manage the property. Macerich Co., a Santa Monica-based real estate investment trust managed the property for Heitman.

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