CHATANOOGA, TN-A clear sign that retail is rebounding, CBL Associates Properties and TIAA-CREF are joining forces to invest in market dominant shopping malls. The companies inked a $1.09-billion joint venture this week.
TIAA-CREF will invest in four CBL properties: Oak Park Mall in Kansas City, KS; West County Center in St. Louis; Coolsprings Galleria in Nashville; and Pearland Town Center in Pearland, TX. Stephen Lebovitz, president and CEO of CBL, says the transaction will not only further the company’s deleveraging efforts by reducing its total debt by approximately $480 million, it will also make it possible for to pursue new opportunities.
“We have been exploring joint venture opportunities for quite some time and our patience and persistence has been rewarded,” Lebovitz says. “We believe TIAA-CREF is the right partner for CBL and together have structured a mutually beneficial venture. We are pleased to recognize the significant enhancement in value for our portfolio through this transaction.”
TIAA-CREF’s Global Real Estate group owns over $14 billion of high-quality properties in the office, retail, industrial and multifamily sectors across the US, Canada, and Western Europe. Now, the firm adds 50% pari passu interest in three enclosed malls—Oak Park Mall, West County Center, and CoolSprings Galleria—and a 12% stake in Pearland Town Center.
Philip McAndrews, managing director and head of global real estate transactions and joint ventures for TIAA-CREF, called the deal an attractive opportunity to expand TIAA-CREF’s long-standing footprint in the dominant regional retail sector. “The investment underscores our continuing strategy to invest in high-quality, well-leased and well-located retail properties with strong and experienced partners, such as CBL,” McAndrews says. “We believe super regional malls are an essential part of a well-diversified portfolio. These assets provide durable income streams along with stable and enduring long term values.”
TIAA will also assume approximately $268 million of property specific debt. CBL will continue to manage and lease the properties. CBL anticipates closing on the transaction by third quarter 2011. Eastdil Secured acted as CBL’s exclusive financial advisor in arranging the joint venture.
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