NEW YORK CITY-With bargain-focused retail and mid-level brands making a comeback just before the holiday shopping rush, financial services firm TIAA-CREF and developer CBL & Associates Properties Inc. proved that the mall is still in-style after closing on a $1.09 billion joint venture in four shopping malls in the Southeast. The malls include: West County Center in St. Louis; CoolSprings Galleria in Nashville; the Oak Park Mall in Kansas City, KS; and the Pearland Town Center Pearland, TX.
According to Real Capital Analytics, the 1.5-million-square-foot Oak Park Mall, anchored by Nordstrom, Dillards and AMC Theaters was purchased for $289 million; the 1.1-million-square-foot West County Center anchored by Nordstrom, Macy’s and JCPenney was bought for $395 million; the 1.1-million-square-foot CoolSprings Galleria anchored by Macy’s, Belk, Sears and Dillards was purchased for $200 million; and the 1.1-million-square-foot Pearland Town Center anchored by Macy’s, Dillards, Sports Authority and Barnes & Noble is worth $204 million.
Philip McAndrews, managing director and head of global real estate transactions and joint ventures for TIAA-CREF, says this investment alongside CBL allows the company to expand their footprint in the suburban retail sector, viewing dominant shopping malls are “an important part” of a well-diversified real estate portfolio. “This investment in super regional malls with CBL is part of our strategy to invest in assets that provide durable income streams with enduring long-term values,” he says, in a statement.
TIAA-CREF received a 50% interest in the three enclosed malls, including Oak Park Mall, West County Center and CoolSprings Galleria, and a 12% interest in Pearland Town Center. In total, CBL reduced outstanding debt balances by approximately $486 million through TIAA-CREF’s assumption of approximately $267 million of property-specific debt and cash proceeds of approximately $219 million.
“With the ongoing disconnect in public versus private market valuations, we believe this transaction provides us with the most advantageous source of monetizing the equity value in our portfolio,” says Stephen Lebovitz, CBL’s president and CEO, in a statement. Eastdil Secured acted as CBL’s executive financial advisor in arranging this transaction.
UPDATE: On Oct. 19, TIAA-CREF and financial services provider APG have formed a joint venture in the four mall properties, one that is 51% owned by TIAA-CREF and 49% owned by APG. The JV has acquired interests in the sites totaling 4.6 million square feet.
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