BLOOMFIELD HILLS, MI-Locally based Taubman Centers Inc. has finalized its $560 million purchase of three malls in Tennessee and California. Evanston, IL-based Davis Street Properties sold the centers, in a deal consisting of debt coverage, installment notes and Taubman partnership units.
Included in the deal is the Mall at Green Hills in Nashville, TN, and the Gardens on El Paseo and El Paseo Village in Palm Desert, CA. Robert Taubman, chairman, president and CEO, announced the deal in October, saying then that the centers were occupied at more than 90%, with sales expected to exceed $700 per square foot on average in 2012.
The deal consists of the assumption of $206 million of debt, $281 million in installment notes and the balance in 1.3 million partnership units in the Taubman Realty Group LP. The installment notes are fully cash collateralized with funds drawn from the company's lines of credit. The notes bear interest at 3.125%, and will be repaid with the cash collateral on Feb. 20, 2012. The number of partnership units issued was determined based on a value of $55 per unit. The partnership units will become eligible to be converted into Taubman common shares after one year. Prior to that date, holders will have the ability to put the units back to the company at the lesser of the current market price of Taubman common shares or $55 per share.
The two El Paseo properties are across the street from each other between San Pablo Avenue and Lupine Lane. Tenants at the 40,000-square-foot Village property include the Apple Store, Janie and Jack and Banana Republic, while tenants at the 200,000-square-foot Gardens include the 50,000-square-foot Saks Fifth Avenue anchor, as well as Tommy Bahama, Tiffany & Co. and Louis Vutton. The Gardens were built in 1998 and the Village was completed in 2010.
The 56-year-old Nashville mall is on Hillsboro Pike, about a mile from Interstate 440. The 887,000-square-foot center is anchored by Nordstrom, Macy’s and Dillard’s. In addition to the enclosed mall, the property includes an exterior retail area of approximately 24,000 square feet as well as the Shops at Green Hills, a 19,000-square-foot freestanding plaza.
Davis Street, a division of the Perlmutter Investment Co., is now down to four properties: The Meadows at Lake Saint Louis in St. Louis, Orland Park Crossing in Orland Park, IL, 622/624/630 Davis St. in Evanston, IL and 430 Park Ave. in Highland Park, IL. Robert Perlmutter, a managing partner of the company, did not return a request for comment about the sale.
A Taubman spokeswoman tells GlobeSt.com that the properties are the dominant properties in their markets, in areas with growing demographics. According to the Davis Street Web site, the California properties benefit from three million visitors annually to the Coachella Valley, while the population around the Nashville mall is about 642,000 with an average income of $82,219.
When Taubman announced the purchase in October, it had been also trying to divest the Pier Shops in Atlantic City and Regency Square in Richmond, VA. Lenders including US Bank National Association took control of the Pier Shops on Oct. 28, but the Taubman spokeswoman says the company still owns Regency. The lender on Regency is Bank of America. Taubman now owns and/or manages 27 centers across the country.
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