The tax-deferred exchange resulted in an after-tax gain of $51 million and generated $73 million in cash proceeds, according to Forest City. The developer's 67 1/2% tenancy-in-common interest previously was optioned for $121.5 million Tucson Mall was built in 1982 and expanded in 1991.

Charles A. Ratner, Forest City president and CEO, says the sale is a prime example "of our disposition strategy in action and our ability to surface the value of our real estate." He says the proceeds will be reinvested into higher-yielding projects. Forest City currently is developing the Mall at Robinson in Pittsburgh and Mall at Stonecrest in Atlanta, both boasting pre-leasing of 85%. Opening in September is the 455,000-sf Queens Place in Queens, NY, an urban retail center that's now more than 95% leased. Forest City also has just unveiled plans for a new project at Station Square in Pittsburgh.

For General Growth, it enlarges its footprint in Tucson's retail market. General Growth is the owner of Park Place, which boasts more than 1.3 million sf of shops in east Tucson. "We expect to create tremendous synergies between the two properties through improved results in management, marketing, leasing and specialty leasing," John Bucksbaum, General Growth Properties CEO, says in a prepared statement.

General Growth financed the Tucson Mall purchase with a short-term acquisition loan and credit line advance. The company is seeking a long-term non-recourse permanent mortgage loan to replace a majority of the interim funding--action that will close later this year. Tucson Mall is projected to produce about $15 million in NOI in 2002.

The two-level mall's anchors are Macy's, Robinson-May, Dillard's, Mervyn's, JCPenney, and Sears. The center has about 409,000 sf of shop space, which is currently 92% occupied by retailers such as Ann Taylor, Disney, Warner Brothers Studios, Old Navy, Eddie Bauer and Banana Republic. Sales equate to approximately $411 per sf.