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CHATTANOOGA, TN-CBL & Associates Properties Inc. has closed on its $516.9-million acquisition of three Midwest Malls. The locally based mall REIT acquired Oak Park Mall in the Kansas City area, Hickory Point Mall in Decatur, IL and Eastland Mall in Bloomington, IL.
The company funded the acquisition with $94.25 million of cash, the assumption of approximately $368 million of new long-term, 5.8% non-recourse mortgage debt, and the issuance of $54.4 million in Special Common Units of the company's operating partnership that will pay a dividend at a rate of 6.0% of the $47.50 issue price for the first two years and 6.25% thereafter.
The initial blended cap rate, based on income in place and after management fees and a structural reserve, is estimated at 5.7%. The acquisition was initially reported as pending in mid-October.
CBL is the fourth largest mall REIT in North America and the largest owner of malls and shopping centers in the Southeast, ranked by gross leasable area. CBL owns, holds interests in or manages 68 million sf in 124 properties in 24 states, and has an additional 1.1 million sf under way in three new centers and two expansions.
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