"The regional mall business is a mature industry that has undergone significant consolidation in the last few years," says company president John Anderson in a prepared statement. "It is important to remain competitive and provide the best shopping environment for our customers. We are exploring our strategic options and how we can best take advantage of and maintain Wilmorite's strong presence in our markets and industry."
Beyond that, the company isn't commenting. Industry analyst Mathew Ostrower of Morgan Stanley tells GlobeSt.com he expects all of the major US mall REITS will seriously consider the opportunity. One question they'll all want an answer to: Can Wilmorite assure that its crown jewel--Tyson's Corner Center in McLean, VA--would be part of any deal?
Juneau-based Alaska Permanent Fund is Wilmorite's 50-50 partner in the 2.1-million-sf asset, which is under expansion. Ostrower says Alaska Permanent Fund exercised a contract option and bought out its previous partner in Tyson's Corner rather than see that interest sold to an unknown third party. "There was a whole process where (Alaska Permanent Fund) took back control and then sold to the person they wanted to sell to," says Ostrower.
The fund ultimately chose Wilmorite to be its new partner in the asset. The unknown at this moment is whether the fund has the same buy-sell provision in its agreement with Wilmorite.
David Stuart, the fund's manager of real estate investments confirms Ostrower's recollection, adding that the fund sold Wilmorite a minority share in Tyson's corner before it sold additional interest to create the current 50-50 partnership. With regard to the company's options at this point, Stuart says the answer is under investigation. "We were alerted to this (merger) possibility not long ago," says Stuart. "Outside legal counsel is evaluating all of the documents associated with that property at this point in time."
Wilmorite's president declined a request for an phone interview through a spokesperson and, as of Monday morning, had not responded to an email query. Wilmorite is considered one of the nation's top 25 retail owners and managers. Its portfolio includes 13 superregional or regional enclosed malls and two open air strip centers.
Tyson's Corner Center is the largest mall in the Washington, DC area and the 10th largest in the US. The Tyson's Corner expansion, slated for completion in August 2005, will include a 16-screen AMC movie theater, five fine-dining restaurants, a 10-unit food court, a children's play area, and 30 new upscale retailers.
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