Taubman Centers, Inc. TCO and Starwood Capital Group ("Starwood"), a
leading global private investment firm, today announced a definitive
agreement whereby Starwood, through a controlled affiliate, has agreed to
purchase a portfolio consisting of seven Taubman malls. The sale is part of
Taubman's ongoing strategy to recycle capital, maximize its NOI growth rate
and create net asset value for investors over time.
"Given today's investor interest in high quality regional malls, we have
taken advantage of the opportunity to further enhance our growth and
valuation, while increasing our industry leading productivity and modestly
reducing the size of our base," said Robert S. Taubman, chairman, president
and chief executive officer of Taubman Centers. "As a result of these sale
transactions, the company's development and redevelopment pipeline will have
an even greater impact on our growth."
Taubman Centers currently owns, leases and/or manages 27 retail properties
in 15 states and South Korea. Its portfolio of 24 owned shopping centers is
the most productive in the U.S. publicly traded regional mall industry. The
company reported mall tenant sales per square foot of $721 in 2013 and upon
completion of these transactions, expects its mall tenant sales to increase
by more than $100 per square foot. "The seven centers we are selling are
strong properties that fit well within the Starwood portfolio and will
continue to thrive under their management," said Mr. Taubman.
"This acquisition is highly strategic for Starwood and its retail operating
platform, Starwood Retail Partners ("SRP")," said Barry Sternlicht, chairman
& chief executive officer of Starwood Capital Group. "These assets will
expand SRP's retail portfolio to 28 properties totaling 26.8 million square
feet across 15 states. The Taubman portfolio broadens our relationships with
higher end department stores and in line tenants and gives us an excellent
opportunity to continue to produce attractive returns for our investors."
SRP, based in Chicago, was formed by Starwood to manage, lease and redevelop
retail real estate assets across the regional mall, lifestyle and power
center sectors in order to maximize property cash flow and long-term value.
SRP has more than 200 employees and, through a combination of talent,
experience and execution capabilities brings hands on experience in
management, leasing and redevelopment to each of its investments. SRP ranks
among the largest regional mall operating platforms in the United States.
The following seven malls are included in the transaction announced today:
-- MacArthur Center (Norfolk, Va.)
-- Stony Point Fashion Park (Richmond, Va.)
-- Northlake Mall (Charlotte, N.C.)
-- The Mall at Wellington Green (Wellington, Fla.)
-- The Shops at Willow Bend (Plano, Tex.)
-- The Mall at Partridge Creek (Clinton Township, Mich.)
-- Fairlane Town Center (Dearborn, Mich.)
Consideration totaling $1.405 billion before transaction costs includes $785
million of cash and $620 million of property-level debt that will be repaid
or assumed at closing by the buyer. Taubman's share of cash and property
level debt are expected to be $765 million and $595 million, respectively.
The transaction, which has been approved by Taubman Centers' Board of
Directors, is subject to normal closing conditions. Taubman was represented
by Eastdil Secured, LLC. Closing is expected to occur in the fourth quarter
of 2014.
By late 2016, new Taubman properties are scheduled to open in Sarasota,
Florida, San Juan, Puerto Rico and Honolulu, Hawaii; and three centers will
debut in China and South Korea. In addition, major redevelopment projects
representing an investment of about $265 million are under way at existing
Taubman centers in Los Angeles, Denver, Nashville, Miami and the San
Francisco Bay area.
Taubman will host a conference call at 11:00 a.m. EDT on Wednesday, June 18
to discuss the transactions. Stockholders and interested parties may listen
to a live broadcast of the conference call by dialing 1-866-820-1712 or
1-973-638-3468 and using reservation code 62953100 or by accessing the call
online at
http://investors.taubman.com/investors/investor-events-and-presentations.
An online replay will be available for approximately 90 days. A telephone
replay will be available until June 25, 2015 and can be accessed at
1-855-859-2056 using reservation code 62953100. Investor materials will be
made available online at
http://investors.taubman.com/investors/investor-events-and-presentations
prior to the event.
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