(For more retail coverage, click GlobeSt.com/RETAIL.)
DENTON, TX-Feldman Mall Properties Inc. will spend $40 million or $135 per sf to take control of the 765,000-sf Golden Triangle Mall from Simon Property Group. The buyer plans to use part of its $39-million gain from an upcoming sale in Phoenix to acquire the retail stronghold in the two-university town in North Texas.
Feldman issued a press release this morning about the pending sale. A Feldman spokeswoman tells GlobeSt.com that the deal will close in the second quarter.
The New York City-based investment group is getting 88%-leased space, totaling 265,000 sf, at 2201 S. Interstate 35E. About 470,000 sf of the mall is corporate-owned by its anchors: Foley's, which will be re-flagged in the fall as a Macy's, JCPenney, Sears, DSW, Dillard's and its Dillard's Men specialty store. The targeted acquisition has more than 90 tenants on the roster, which Feldman projects will return an initial un-leveraged yield of about 7.5% based on this year's anticipated operating income. National retailers in leased space include Barnes & Noble, Victoria's Secret, American Eagle Outfitters, Pacific Coast Sun Wear and Bath & Body Works.
Feldman's plan for Golden Triangle Mall includes a multimillion-dollar overhaul, including fashioning space for more sit-down restaurants and a food court. "The Golden Triangle Mall is a perfect fit for FMP," Larry Feldman, chairman and CEO, says in the release. He adds that the initial thrust, though, will be "to attract key retailers that draw in the more affluent shoppers of the Denton/Dallas area."
Feldman's plan is to deploy part of the gain that will be realized in May when it hands off a stake in Tucson's Foothills Mall to New Hyde Park, NY-based Kimco Realty Corp. That deal hinges on the JV's ability to obtain new mortgage financing. Though Feldman indicated the JV would extend beyond the Tucson deal, the initial plan is to solo on the acquisition from the Indianapolis-based Simon, the spokeswoman says.
According to the press release, the initial funds for the Texas purchase will come from a private placement with an affiliate of Kodiak Funding LP. The preferred securities have a 30-year term. The effective interest rate, which is Libor based, is 8.69% in a fixed-rate component for the first five years and thereafter priced at a 3.45% float above the three-month Libor. The securities are redeemable after April 30, 2011.
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