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Macerich Buying Southern Oregon Mall for $187M-Plus

EUGENE, OR-The publicly held mall REIT is acquiring the 916,000-sf super-regional mall it already managed from Grosvenor, a privately held real estate developer and investor.

By Brian K. Miller | Updated on January 12, 2006

EUGENE, OR-The 916,000-sf Valley River Center is under contract to be sold for $187.5 million. The current owner, Grosvenor, a privately held real estate developer and investor, has agreed to sell the super-regional mall to the operating partnership of the publicly held Macerich Company, which already has the management assignment for the property.

Located a few minutes from Interstate 5 at the junction of Delta Highway and Valley River Drive, Valley River Center originally opened in 1969 and was expanded in 1974 and 1989. The mall is anchored by Meier & Frank (181,000 sf), Macy’s (124,000 sf) and J.C. Penney (218,000 sf). The mall includes 254,000 sf of mall shop space producing annual sales of $420 per sf. A 15-screen Regal Cinema is in the planning stage. Grosvenor will continue to own certain out parcels adjacent to the mall, according to the agreement. Macerich estimates its first-year return on investment to be 6.6%.

Given Federated’s post-May Co. acquisition strategy to convert all May Co. department stores (including Meier & Frank stores) to the Macy’s brand and close duplicate locations, one of the mall’s anchors likely is on its way out. An executive with The Macerich Partnership LP did not return a phone call seeking comment on that and other issues, such as shop space occupancy.

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