Ian Ritter is national online editor for GlobeSt.com/RETAIL.
SANTA MONICA, CA-The Macerich Co. is in a deal to buy private mall owner Wilmorite Properties for about $2.3 billion, in a move that will increase its East Coast presence. The purchase will give Macerich a portfolio of 11 regional malls and two open-air centers to add to its 63 regional centers.
Included in the deal is a 50% stake in the two-million-sf Tysons Corner Center in McLean, VA, the highest-profile property owned by Rochester, NY-based Wilmorite. Bloomingdales, Hecht's, LLBean, Lord &Taylor and Nordstrom anchor that center. The other super-regional centers on the East Coast that Macerich will acquire are the 1.5-million-sf Freehold (NJ) Raceway Mall and the 1.3-million-sf Danbury (CT) Fair Mall. The average sales per-sf of Tysons, Freehold and Danbury are $525. Arthur Coppola, Macerich's president and CEO, says there are expansion opportunities at Tysons and Freehold.
Currently Macerich, based here, owns one East Coast gem, the Queens (NY) Mall, a center that it recently expanded at a cost of $275 million, but the majority of its centers are on the West Coast and in the Southwest. The remainder of the Wilmorite deal is made up of centers in upstate New York and Kentucky, and the total portfolio's sales per-sf are $403.
Wilmorite officials said in October that they were exploring "strategic alternatives." One issue brought up by analysts at the time was whether Wilmorite would be able to include its 50% stake in Tysons as part of the deal because the other partner in the center, Alaska Permanent Fund, might try to block the transaction.
Macerich and Wilmorite officials say they expect to close the transaction in March. The last deal that Macerich did of this magnitude was in 2002, when it bought Westcor's 27-center portfolio of Southwestern upscale malls and open-air centers for nearly $1.5 billion.
This latest deal has a capitalization rate of 5.75%. Macerich is assuming $882 million in debt and issuing preferred and common shares of stock valued at $320 million. The company is also financing the transaction with a $600-million, five-year unsecured term note and a $300-million interim loan with a term of up to 1.5 years.
The Macerich-Wilmorite acquisition comes at a time of major consolidation in the retail real estate industry. On Sunday, Plymouth Meeting, PA-based center owner Kramont Realty Trust entered into an agreement to sell its 93 properties to Australia-based Centro Properties Group for $610 million. Other major acquisitions of the year have included General Growth Properties' $7.2-billion purchase of the Rouse Co. and Simon Property Group's $3.5-billion buy of Chelsea Property Group.
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