DALLAS-Armed with proceeds from the $34.2 million sale of Kierland Commons in Scottsdale, AZ, Woodbine Development Corp. plans to ramp up its investment activity.
The local company, along with its joint venture partner, Scottsdale, AZ-based Herberger Interests, sold a 50% interest in the mixed-use project to Macerich and its joint venture partner Institutional Mall Investors LLC. The purchase price for Kierland Commons included the assumption of a pro rata share of debt of $18.6 million.
The deal comes six years after Macerich and Institutional Mall Investors acquired a 49% interest in the 38-acre project. Now, the duo each owns 50% of the development, which opened in 2000.
The 600,000-square-foot Main Street development includes 70 upscale retailers, 14 restaurant concepts, entertainment venues, office space and 84 luxury loft condominiums in The Plaza Lofts at Kierland Commons. The project's 316,000 square feet of retail space is 98% occupied and produces annual small shop tenant sales of $625 per square foot.
Woodbine Development will continue to have an interest in the residential component of the project, the Plaza Lofts at Kierland Commons.
“It was a good time for us to sell,” says Buzz Gosnell, president of Woodbine Southwest Corp., an affiliate of Woodbine Development. “Given where we stand right now in the current cycle, it makes sense for us to look at other opportunities.”
Gosnell tells GlobeSt.com that Woodbine Development’s investment activity over the past couple of years has been minimal. “We’ll be able to deploy the money from the sale of Kierland Commons in different areas,” he says, adding that Woodbine will focus on the hospitality sector in the Southwest.
“We may be able to buy some hotel assets, renovate them and then reposition them,” Gosnell says. “There may also be some development opportunities.” Additionally, the company is also interested in partnering with existing hotel owners and exploring asset management opportunities.
Gosnell says Macerich and Institutional Mall Investors were the “logical” buyer for Woodbine’s remaining interest in Kierland Commons. “We’ve have that in the back of our mind as an exit strategy,” he explains. “It worked out well for all the parties involved.”
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