The remaining three stores will be purchased by Westfield for $18.5 million in a separate purchase and sale agreement. The transactions are expected to be completed in the second quarter of 2006.
In a statement, Westfield managing director Peter Lowy says the acquisition creates new opportunities and enables the company to pursue $2 billion in new redevelopments during the next four years. "These are expected to generate income yields on cost of 9.5% to 10%," including costs to Federated, Lowy notes.
The stores acquired in the transaction include: Hecht's Wheaton Plaza, Wheaton, MD (179,000 sf); Macy's Richland Mall, Mansfield, OH, (195,000 sf); Macy's Trumbull Shopping Park, Trumbull, CT, (217,000 sf); Macy's North County Fair, Escondido, CA, (151,000 sf); Macy's Palm Desert-apparel, Palm Desert, CA, (137,000 sf); Macy's Palm Desert-home, Palm Desert, CA, (80,000 sf); Macy's West Covina, West Covina, CA, (150,000 sf); Robinsons-May Fox Hills, Culver City, CA, (150,000 sf); Robinsons-May Main Place-north, Santa Ana, CA, (149,000 sf); Robinsons-May North County Fair-north, Escondido, CA, (112,000 sf); Robinsons-May Plaza Camino Real, Carlsbad, CA, (150,000 sf); Robinsons-May Santa Anita Fashion Park, Arcadia, CA, (181,000 sf); and Robinsons-May University Towne Center, La Jolla, CA, (147,000 sf).
The final two locations are Macy's University Town Center in La Jolla, CA and Macy's Main Place in Santa Ana, CA. Federated expects to lease back and operate these stores as Macy's, pending redevelopment of the malls and construction of new stores.
Independent from these transactions, Westfield and Federated have also agreed upon 18 new redevelopments at Westfield-owned shopping centers. In reference to these redevelopments, Westfield execs say the company is negotiating with other anchor stores including Nordstrom, J.C. Penney and Target.
Federated Department Stores previously announced that it would dispose of 84 surplus stores as part of their acquisition of the May Department Stores Co. In acquiring May, Federated added 490 department stores and 720 bridal and formalwear units to its existing stable of 460 department stores. Federated previously announced its intention to divest May's bridal group business and convert all of May's regional chains to the Macy's brand, and earlier this month announced the sale of its Lord & Taylor division.
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