CBL & Associates Properties Inc., based in Chattanooga, Tenn., is buying the 850,000-sq.-ft. Kirkwood Mall from Radiant Partners for an undisclosed amount.
In December, CBL purchased a 49 percent controlling interest in the 41-year-old mall, which includes anchors Herberger’s, Keating Furniture, JCPenney, Scheel’s All Sport and Target. Thursday, the company said it will close on the remaining interest within 90 days. The company is also assuming a $40.4 million non-recourse loan secured by the property, which bears a fixed interest rate of 5.75% and matures in April 2018.
Stephen Lebovitz, president and CEO of CBL, said in a statement that the acquisition will add a high-quality, growing property to the company portfolio. “Similar to Dakota Square Mall in Minot, N.D., which we acquired in 2012, Kirkwood Mall is enjoying remarkable growth from its proximity to the Bakken Formation oil reserves. We anticipate increasing the net operating income from the center through near- and long-term opportunities, including rent growth from roll-over leases as well as occupancy improvements and development of peripheral property.”
He said the local economy has grown tremendously in recent years as a result of its proximity to the Bakken Formation. The state has the lowest unemployment rate in the country and is one of only a few states with a budget surplus. Bismarck’s unemployment rate is estimated to be less than 4%, Lebovitz said. Real estate experts also predict that areas near technology or energy growth are likely to lead the country out of the recession.
Kirkwood is 87-percent leased, and includes additional tenants such as the Buckle, Chico’s, Justice, the Children’s Place and Victoria’s Secret. Sales per square foot at the center have increased more than 15 percent to more than $400 per square foot for 2012, said CBL officials.