Corporate Mergers Houston-based CenterAmerica Property Trust and a major corporate pension fund are planning a venture for the purpose of developing and acquiring neighborhood shopping centers throughout the Southeast and Southwest.
CenterAmerica is designated as the managing member and will have responsibility for initiating new development projects and acquisitions of existing shopping centers. The two parties will jointly invest approximately $83 million of equity. Including financing from national banks, with whom CenterAmerica has lending relationships, the fund is expected to invest almost $300 million in new projects. To initiate the new fund, CenterAmerica will contribute six recently acquired shopping centers and several new development sites that are currently under option.
The centers to be contributed are Sarasota Village in Sarasota, Fla.; Atlantic Plaza in Satellite Beach, Fla.; Jacksonian Plaza in Jackson, Miss.; Raymond Road Shopping Center, also in Jackson; Harwood Central Village in Bedford, Texas; and Ladera Plaza in Albuquerque, N.M. CenterAmerica's controlling ownership is held by an affiliate of New York-based Morgan Stanley Real Estate Fund II. The unnamed pension fund's real estate investments are directed by New York-based Morgan Guaranty Trust Co., an affiliate of New York-based J.P. Morgan, which retained AEW Capital Management LP, Boston, to underwrite the investment and provide asset management services.
Sales & acquisitions A partnership led by Fort Worth, Texas-based Trademark has purchased and plans to redevelop a former Service Merchandise building in Midland, Texas. The property, sold by the retailer, comprises 50,000 sq. ft. and is part of Midland Plaza Shopping Center. Trademark plans to divide the building into two spaces and has signed leases with Michaels and Bed, Bath & Beyond, both of which are expected to open next month. Midland Plaza currently is anchored by Mervyn's and Pier 1 Imports.
Essex Green Shopping Center in West Orange, N.J., has been sold for $42 million to CIN Essex Green LP, a venture between an affiliate of New York-based Investcorp International Inc. and Dallas-based Crow Holdings. The seller of the property was Manhattan-based MONY Life Insurance Co. Essex Green is a 352,000 sq. ft. open-air shopping center anchored by Sterns department store, Sears Hardware, Petco, General Cinema and Shop Rite. Following the sale, the new owners appointed their broker in the transaction, Old Bridge, N.J.-based R.J. Brunelli & Co. Inc., as the exclusive leasing agent for the property. Jones Lang LaSalle's Atlanta-based retail division represented the seller.
Dallas-based Henry S. Miller Cos. has acquired four Texas shopping centers totaling more than 238,000 sq. ft. of space. The $30 million portfolio, sold by Dallas-based ASG Realty, involves centers in Dallas and Tarrant counties. They include: Central Forest Shopping Center in Dallas, Stanton Oaks in Arlington, Hilltop Shopping Center in North Richland Hills and Towne North Shopping Center in southwest Irving.
St. Louis-based Walpert Properties has acquired Arkansas Court Shopping Center in Arlington, Texas. The 114,716 sq. ft. center is anchored by Women's Total Fitness and has 25,379 sq. ft. of anchor space available. Dallas-based Trans Texas Investment Properties sold the shopping center for $5.3 million.
Baltimore-based Prime Retail Inc. has closed on the second installment of its agreement to sell three factory outlet centers to an existing joint venture between the company and an affiliate of Orlando, Fla.-based Estein & Associates USA Ltd.
The second installment consisted of the sale of Prime Outlets at Williamsburg, located near the Colonial Williamsburg area in Virginia, for $59 million. The center currently features 274,000 sq. ft. of GLA andplans are to expand it by 60,000 sq. ft. to 70,000 sq. ft. by year end. The sale price of the center's expansion to the venture will be between $15 million and $17.5 million and is currently scheduled to close in mid-November.
The other two centers involved in the sale include Prime Outlets at Birch Run in Birch Run, Mich., and Prime Outlets at Hagerstown in Hagerstown, Md. The Birch Run center closed in November for $117 million, and the Hagerstown center is expected to close by second quarter for $80.5 million.
As previously announced, the venture had agreed to purchase the three factory outlet centers, including two future expansions, from Prime Retail for a total purchase price of $274 million, including assumption of $151.5 million of debt. The purchase price includes an $8 million payment to Prime Retail for a 10-year not-to-compete covenant and a $6 million payment for a 10-year licensing agreement to continue to use the Prime Outlets brand name.
The Maui Marketplace Shopping Center in Maui, Hawaii, has been sold to Chicago-based LaSalle Investment Management Inc., on behalf of an institutional investor. The power center, which features 317,300 sq. ft. of GLA, was valued in excess of $50 million. The seller, represented by Palo Alto, Calif.-based Marcus & Millichap Real Estate Investment Brokerage Co., was The MacNaughton Group, Honolulu. Tenants in The Maui Marketplace include Eagle Hardware, The Sports Authority, Borders Books, OfficeMax, Old Navy, Pier 1, Starbucks, Jamba Juice and Burger King as well as approximately 20 other retailers and a food court.
A 20-acre parcel of land in Temecula, Calif., has been sold to Beverly Hills, Calif.-based Pacific Development Partners, which plans to develop a neighborhood shopping center on the site. The property is located on the northwest corner of Winchester and Nicholas roads. The land was sold by La Jolla, Calif.-based DMWR Ltd. for $4.2 million. Burnham Retail Group, a division of San Diego-based Burnham Real Estate Services, represented both parties in the transaction.
Stones River Mall, a 450,000 sq. ft. center in Murfreesboro, Tenn., has been sold for $32 million to an affiliate of New York-based Concorde Realty Partners LLC. The center is anchored by Dillard's, Sears, JCPenney and Goody's and features such tenants as Victoria's Secret, Bath & Body Works, American Eagle Outfitters and Zales Jewelers. The seller was an affiliate of New York-based Citicorp Real Estate Inc.
Expanding its presence in the West Valley area of Los Angeles, Santa Monica, Calif.-based Caruso Affiliated Holdings has purchased Parkway Calabasas Center, located directly across from The Commons at Calabasas, also owned by Caruso. The 80,000 sq. ft. center in Calabasas, Calif., is anchored by Babies 'R' Us. Plans are to remodel the property by year end as a natural extension of The Commons at Calabasas. Parkway Calabasas was purchased from Hartford, Conn.-based Aetna Life Insurance Co. for approximately $18 million.
Financing awards The Los Angeles office of Chicago-based Cohen Financial has provided financing totaling $32 million for the partial razing and redevelopment of a grocery-anchored retail center located in Culver City, Calif. The borrower is a California general partnership that acquired the property in 1980. Culver Center totals 188,197 sq. ft. and currently features Ralph's and Bally Total Fitness. The phased redevelopment, which will increase the size of the center to 204,725 sq. ft., involves the razing of 47,500 sq. ft. of in-line shop space, the construction of a new 45,000 sq. ft. Best Buy store with an upper-level parking deck, the relocation and expansion of Ralph's from 27,587 sq. ft. to 48,000 sq. ft., and a 16,880 sq. ft. expansion of Bally's.
WMF NY Urban, part of The WMF Group Ltd., Vienna, Va., has closed on a $3.14 million loan to refinance Janovic Plaza, a two-story retail building in New York. The borrower was New York-based Haymes Broadway LLC, and the lender was Boston-based John Hancock Real Estate Finance Inc. Built in 1929, the property features 15,000sq. ft. of space and includes a Janovic home decorating store, a fitness center and a children's play area. The transaction has a term of 10 years, amortizes over 30 years, and carries an 8.83% interest rate.
Permanent financing through a $3.6 million loan has been arranged for Highland Retail Center in Arlington, Texas. Dallas-based Windstar Properties was the borrower, and New York-based Lehman Brothers Bank FSB was the lender. The 21,168 sq. ft. shopping center was built last year and features The Men's Wearhouse, 3-Day Blinds, Colter's Bar-B-Q, PrimeCo and Big & Tall. Dallas-based Holliday Fenoglio Fowler LP arranged the 10-year, fixed-rate loan.
Management Contracts Jones Lang LaSalle's Atlanta-based retail division has been awarded leasing and management assignments for several shopping centers throughout the country. The O'Connor Group, New York, has selected the company for three of its regional malls. They include Dakota Square, a 663,000 sq. ft. center in Minot, N.D.; Southdale Center, a 1.2 million sq. ft. mall in Edina, Minn.; and Tri-County Mall, a 1.3 million sq. ft. center in Cincinnati. In addition, Jones Lang LaSalle will be managing and leasing several properties for Atlanta-based Lend Lease Real Estate Investments Inc. They include Greenbrier Mall, an 808,800 sq. ft. center in Chesapeake, Va.; Magic Valley and The Shops at Magic Valley, a 479,500 sq. ft. complex in Twin Falls, Idaho; Rogue Valley, a 633,000 sq. ft. property in Medford, Ore.; Skyview Plaza, a 281,200 sq. ft. center in Orlando, Fla.; and Westgate Mall, an 887,000 sq. ft. mall in Amarillo, Texas.
Houston-based PM Realty Group has been awarded the property management and leasing contract for four shopping centers in the greater New York area by owner/developer Kmart Corp., Troy, Mich. The portfolio includes a 207,000 sq. ft. shopping center in Pelham Manor, N.Y.; a 107,000 sq. ft. center in Woodmere, N.Y.; a 199,000 sq. ft. center in West Orange, N.J.; and a 187,000 sq. ft. center in the Bronx, N.Y. The addition of this contract expands PM Realty Group's share of the Kmart portfolio to 38 centers, totaling 5.5 million sq. ft. of space, since the company began working with the retailer in 1996.
New York-based Emmes Realty Services LLC is the new property manager of 685 Third Avenue, a 31-story, mixed-use building in Manhattan. Its affiliate, Emmes Asset Management Co., has been serving as the property's asset manager since 1997. The 657,000 sq. ft. building, owned by a partnership that includes affiliates of Blackacre Capital Group and Argent Ventures, both based in New York, features 33,000 sq. ft. of retail space with frontage on Third Avenue and East 43rd Street. New York-based Insignia/ESG Inc. will continue to serve as the office and retail leasing agent for the building.
Burlington, Mass.-based Finard & Co. LLC has been named the management and leasing agent for two retail centers in Massachusetts, totaling more than 66,000 sq. ft. In Danvers, the 28,824 sq. ft. property, owned by Littleton, Mass.-based JFY Realty Trust, features Hitchcock Furniture and Able Rug. In Natick, the 37,830 sq. ft. retail center also features Hitchcock Furniture and is owned by Littleton-based Bradford Natick Realty Trust.
Mount Laurel, N.J.-based Metro Commercial Management Services Inc. has been named property manager at three shopping centers in the Northeast. Deptford Crossing is a 200,000 sq. ft. center in Deptford, N.J., that is anchored by Marshalls, T.J. Maxx, OfficeMax, Michaels, JoAnn Fabrics and PetsMart. It is owned by New York-based Dean Witter Real Estate. Clifton Commons is a 107,000 sq. ft. complex in Clifton, N.J., that is anchored by Edwards Supermarket, Staples and Hallmark. It is owned by Landover, Md.-based Ahold Real Estate Co. Sharon Hill Shopping Center is an 87,000 sq. ft. center in Sharon Hill, Pa., that features Acme Supermarket, Rite Aid, Dollar Express, Fashion Bug, Payless ShoeSource and Blockbuster Video. It is owned by Sharon Hill Chester Pike LP, Ardmore, Pa.
New Ventures The Reliant Group Ltd., a Chicago-based developer of large-scale retail, industrial and commercial land development projects, has been formed. The five principals in the company include senior executives or consultants from the former Hiffman Shaffer Associates Inc., which recently split into three separate companies - The Reliant Group Ltd., NAI Hiffman, and HSA Commercial Inc. Currently, The Reliant Group is involved in $500 million of income-producing property and land. Those leading the new company are E. Thomas Collins Jr., Richard E. Hulina, Mary Riordan, Jay S. Eigel and Thomas G. Kafkes.
Carlsbad, Calif.-based GMS Realty LLC is poised for continued growth in acquisitions and development as a result of a recent recapitalization of the company. The recapitalization provides for the sale of a portfolio of 15 California shopping centers owned by GMS Realty, which is a partnership between Carlsbad-based Gerrity Investment I and New York-based Morgan Stanley Real Estate Fund. The centers were sold to a new venture of Principal Enterprise Capital I (PEC) - an institutional investment fund of Des Moines, Iowa-based Principal Financial Group - and Gerrity Investment II, also based in Carlsbad.
Other Transactions The newly formed partnership also acquired the management entity and the rights to the name GMS Realty LLC and will continue to operate under that name. The transaction is valued at more than $287 million and involves properties totaling 2.2 million sq. ft. in GLA. They include: Lemon Grove Plaza, Hawthorne Center, Tierrasanta Town Center, Camino Village Plaza and Felicita Town Center in San Diego County; Temecula Town Center, Palms to Pines Shopping Center and La Quinta Village in Riverside County; The Quad at Whittier, Atlantic Square and Somerset Plaza in Los Angeles County; Sunrise Village and Marbella Plaza in Orange County; The Marketplace at San Ramon in Contra Costa County; and Prunetree Shopping Center in North Monterey County.
The newly formed GMS Realty LLC will continue the operations of its predecessor as a fully integrated operating company focused on the acquisition, development, redevelopment, management and leasing of its own properties, as well as management and leasing of 2.6 million sq. ft. of GLA in 17 shopping centers for third parties.