Feldman Mall Properties — which focuses on renovating and repositioning enclosed regional malls in secondary markets — had a dilemma on its hands. Feldman purchased the Tallahassee Mall in July 2005 for just over $60 million. But it didn't have control of 103,000 square feet of former anchor space currently being inhabited by a Goody's Family Clothing and Ross Dress for Less. Instead, rival developer Kimco Realty Corp. retained control of the anchor space — the spoils of its previous acquisition of the lease from F.W. Woolworth.

The two companies, though, were able to hatch a unique solution: Kimco turned over the lease to Feldman in exchange for 369,375 shares of Feldman common stock. As of late December the shares were worth approximately $11.80 per share, making the transaction total about $4.3 million. Kimco Realty Corp. controlled the lease through a subsidiary specializing in tenant bankruptcies.

Even though Feldman now controls the space, it will have to wait to have the option to retenant it. (Both Goody's and Ross are signed at below-market-rate rents.)

Kimco sublet the space to the two junior anchors, which have six and 11 years remaining on their terms, respectively. Goody's also has a five-year option to renew its lease in 2012.

However, the deal does make Feldman the direct landlord to both Goody's and Ross Dress for Less. As a result, it will collect about $484,000 a year from the two tenants for the duration of their leases. And, eventually, it will be able to decide whether to retain or replace both stores.

“The purchase of this leasehold interest is a good transaction for both Feldman and Kimco,” said Larry Feldman, chairman and CEO of Feldman Properties in a statement. “For Feldman, we receive a reasonable cash yield on our investment and we will get control over an important portion of the real estate.”

According to the terms of the transaction, Kimco must retain its Feldman shares for at least 12 months.