Cousins initially will be contributing the Avenue East Cobb, the Avenue West Cobb, the Avenue Peachtree City, the Avenue Viera and Viera Market Center aggregately valued at $342.4 million, Cousins officials say in a prepared statement. Prudential is contributing at least $342 million in cash. PREI's contributions are scheduled to be made in four installments over the balance of 2006.
The aggregate value of Cousins' contributions could increase by $20.5 million "if certain conditions are satisfied" at Viera MarketCenter and the Avenue West Cobb which are both under construction, the company states. If the value of Cousins' contributions increase, PREI would increase its cash contributions to match the agreed value of the REIT's properties. Cousins will continue to manage and lease the contributed projects.
Cousins will direct and manage the investment of the contributed cash and expects the joint venture would primarily use the cash to fund new development opportunities. Up to December of this year, Cousins and PREI will each have a 50% interest in the venture, as they have had in an existing venture they formed in 1998.
"However, following the December 2006 contribution [by PREI], generally PREI and Cousins would have economic interests in the contributed projects of 88.5% and 11.5% respectively," according to the Cousins' statement.
On new development projects, beginning with PREI's first $100-million contribution in June, Cousins will have ownership interests of 88.5% and PREI, 11.5%.
"We are thrilled to expand our eight-year relationship with PREI to include another innovative venture," says Cousins CEO and president Tom Bell. "Cousins has been fortunate over its 48-year history to partner with some of the country's top companies and this is another example of how our partnerships put Cousins in a position to create value for our shareholders."
Additionally, Bell says, "this venture allows us to capture the value we've created in these retail projects while maintaining control over The Avenue brand, which has earned a reputation for high-quality, innovative shopping environments with both retailers and consumers."
Bell says that "with the recent increase in our unsecured credit facility and the completion of a new unsecured construction facility, this venture will provide funding for new value-creation opportunities."
Dale Taysom, managing director of transactions for PREI, says the joint venture "among other things, allows us to selectively provide opportunities for our investors to participate in the high-end retail marketplace."
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