Besides these our coverage of the week’s biggest deal—Simon Property Group’s announced acquisition of Prime Outlets Acquisition Co., make sure to check
Pacific Retail Capital Partners acquired the 1.1-million-square-foot West Oaks Mall in Houston for $15 million through marketing conducted by Holliday Fenoglio Fowler L.P. (HFF) for special servicer LNR Partners Inc.
HFF senior managing directors Robert Williamson and Rusty Tamlyn represented LNR Partners, Inc. in the sale of West Oaks Mall, which LNR acquired in 2008 through foreclosure. The principals of Pacific Retail Capital Partners previously purchased the mall in 2003, made substantial renovations and sold it in 2005 for $102 million to Investment Properties of America when they were with Somera Capital.
“West Oaks Mall is an incredible value, well-located in a thriving community but it also requires a significant investment of management and leasing expertise to reposition the mall,” Pacific Retail Capital Partners Managing Principal Steve Plenge said in a statement. “We will work to repair the center’s image in the community as well as invest capital to refresh the property and potentially undertake some redevelopment.”
West Oaks Mall currently has three major anchors, Dillard’s, Macy’s and Sears. Previous anchor tenants JCPenney and Mervyns exited the center, leaving these spaces available for renovation and repositioning. The team has specifically identified the wing of the center formerly anchored by Mervyns to evaluate for redevelopment. The remainder of the center’s retail space is approximately 60 percent occupied.
Pacific Retail Capital Partners has created a joint venture with Collarmele Partners to handle the management, retail leasing, redevelopment and construction supervision of the mall.
The West Oaks Mall acquisition is the first for Pacific Retail. The company is targeting additional regional mall acquisitions, similar to West Oaks Mall—assets it views as undervalued, underperforming centers in strong communities where Pacific Retail can apply its leasing, management and development expertise to improve performance and asset value.
Kimco Realty to Conduct Common Stock Offering
Kimco Realty Corp. (NYSE: KIM) is conducting a public offering of 25 million shares of its common stock at a price of $12.50 per share. The company has granted the underwriters an option to purchase up to an additional 3.75 million to cover over-allotments, if any.
The company expects to use the net proceeds received from this offering, which are expected to be approximately $300 million to partially repay amounts borrowed under its $1.5 billion unsecured U.S. revolving credit facility. The facility is scheduled to mature in October 2011. The company has an option to extend the facility for an additional one-year term. Any remaining net proceeds from this offering will be used for general corporate purposes.
Deutsche Bank Securities, BofA Merrill Lynch and Citi are acting as the joint book-running managers for the offering. Morgan Stanley, RBC Capital Markets, Scotia Capital and Wells Fargo Securities are acting as joint lead managers. Barclays Capital, CIBC, Morgan Keegan & Co., UBS Investment Bank, Piper Jaffray, RBS and Stifel Nicolaus are acting as co-managers.
West Hollywood Retail Property Trades for $901 PSF
After more than a year of litigation, a West Hollywood retail property owned by Joey Bishop Productions Inc. was sold in an estate sale for $6.2 million ($901 per square foot), according to Jay Martinez, a principal of Lee & Associates-LA North/Ventura Inc., who represented the estate of the entertainer.
Sakhi Properties LLC acquired the property to house its business, Amadi Carpets, and was represented by Lee & Associates-LA North/Ventura Inc. president Mike Tingus.
“While this $901-per-square-foot price tag may seem huge, it’s important to remember that retail properties in this same location were selling for much, much more before the recession set in,” Martinez said in a statement. “For example, 146 S. Robertson Blvd., a 4,644-square-foot retail building located just .3 miles away, sold for $3,143 per square foot in June 2008. So this sale is a prime example of how buyers can capitalize on today’s prices to secure an asset with tremendous appreciation potential.”
The property consists of two multi-tenant buildings totaling 6,876 square feet on a two parcel, 13,142-square-foot lot with 209 feet of street frontage on Robertson. It sits on one city block between Beverly Boulevard and Melrose.
The property had been tied up in litigation following Bishop’s death in October 2007 and was listed in a mandatory estate sale in April at $8 million. Martinez reports that the 23 offers received were narrowed down to the top seven before the buyer, whose current retail location is across the street from the property, was chosen.
Joffco Square Seeks Chapter 11 Reorganization
Northbrook, Ill.-based River West Plaza-LLC filed a Chapter 11 petition for bankruptcy protection from creditors and a reorganization plan in U.S. Bankruptcy Court on behalf of its principal asset, the 95,000-squrae-foot Joffco Square in Chicago.
Meltzer, Purtill & Stelle LLC is representing the petitioner. The reorganization plan provides for its 30 or so trade creditors to be paid in full with interest and that the terms of the company’s $26.2-million acquisition and construction loan, which matured on November 1, be renegotiated with Bank of America, N.A.
Joffco Square is 83 percent occupied and generates positive cash flow. The company anticipates it will emerge from Chapter 11 in the first quarter of 2010 on a financial footing that will keep key ownership intact.
River West acquired the property in 2003 and has since developed it into a five-story retail center with three levels of parking. The project opened in March of 2008 with 72,482-squrae-feet of space leased to two major anchor tenants, Best Buy and Bed Bath and Beyond
Other Notable Deals
Stoneridge Capital Partners, a Newport Beach-based real estate investment company, acquired 104,600-square-foot The Village at Indian Wells from A&B Properties Inc. in a $20-million, all cash transaction. The center is anchored by a Ralph’s Fresh Fare and CVS drugstore. Sam Alison of CB Richard Ellis represented A&B. Stoneridge did not use broker representation.
The Atlanta office of HFF closed the sale of a 44,271-square-foot Publix grocery store in Birmingham, Ala. The HFF investment sales team was led by director Jim Hamilton who represented the seller, Inland Western Retail Real Estate Trust Inc. Cole Capital – Cole Real Estate Investments purchased the property for $6.1 million free and clear of debt. In addition, HFF Atlanta recently closed the sale of a Harris Teeter store in North Carolina on behalf of Inland Western. Completed in 2004, the property is fully leased to Publix through November 2024.
Colliers International directed the sale of a 4,252-square-foot Applebee’s in Roanoke, Va., and a 10,403-square-foot Ryan’s Grill Buffet & Bakery in Oak Ridge, Tenn., to J&K Commercial LLP, a private investor, for a combined $3.6 million. Maurice Nieman and Ian Schroeder, vice presidents in Colliers International’s Irvine, Calif. office, represented the buyer in the Applebee’s deal and the buyer and the seller in the Ryan’s deal.
Kevin T. Fryman and Eric P. Wohl of Hanley Investment Group Real Estate Advisors represented the buyer and seller in the sale of the 12,1550-square-foot Bellflower Plaza in Bellflower, Calif., for $2.1 million, representing a 6.63 percent cap rate. Built in 1980, Bellflower Plaza was 92 percent occupied at the time of sale. The buyer paid all cash for the property.