GREENWICH, CT—Starwood Capital Group and Taubman Centers Inc. said Wednesday that they had forged a deal for Starwood to buy seven Taubman malls for $1.4 billion. The acquisition boosts Starwood’s retail operating platform, Starwood Retail Partners.
“”These assets will expand SRP’s retail portfolio to 28 properties totaling 26.8 million square feet across 15 states,” says Barry Sternlicht, chairman and CEO of Starwood Capital. “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.”
For Taubman, the sale continues the Bloomfield Hills, MI-based mall operator’s strategy of recycling capital, maximizing NOI growth and create NAV 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,” says Robert S. Taubman, chairman, president and CEO of Taubman Centers.
The portfolio is trading for $785 million in cash and the assumption of $620 million of property-level debt. Taubman’s share of cash and property level debt are expected to be $765 million and $595 million, respectively.
The assets are dispersed across the Midwest, Southeast, Mid-Atlantic and Southwest. They include the Mall at Partridge Creek in Clinton Township, MI; Fairlane Town Center in Dearborn, MI; Northlake Mall in Charlotte; the Mall at Wellington Green in Wellington, FL; MacArthur Center in Norfolk, VA; and the Shops at Willow Bend in Plano, TX. Taubman, which was represented by Eastdil Secured, expects its mall tenant sales to increase by an average of $100 per square foot after completion of the deal sometime in the fourth quarter.