The shopping center, located on 31 acres at the prime northeast corner of 24th Street and Camelback Road in the city's prestigious Biltmore section, will be jointly owned by Macerich in partnership with an unidentified institutional investor. Long considered one of the area's crown jewels of retail, the center is anchored by Saks Fifth Avenue and Macy's and houses specialty retailers that include Tommy Bahama, Allen-Edmonds, Polo by Ralph Lauren, Gucci, Escada, Stuart Weitzman, Cole-Hahn, Cartier and Elizabeth Arden Salon. It is the seventh metro-area mall holding for Macerich.

The acquisition gives Macerich control of two major malls within five miles of each other. "Historically, there has been competitive tension between Biltmore and Scottsdale Fashion and there have been numerous radius clauses imposed by both landlords," says Arthur Coppola, Macerich president and CEO. "Combining these two properties under common ownership will give us the opportunity to provide Valley shoppers and tourists the next tier of quality shopping and the opportunity for specialty shops and restaurants eager to expand into the Arizona marketplace to deal in an optimum environment from both the consumers' and the retailers' viewpoints."

Macerich's acquisition of Biltmore Fashion Park came nearly a year after negotiations on the property began, shortly after the Santa Monica, CA buyer purchased several Valley Malls, including Scottsdale Fashion Square and Chandler Fashion Center, from Westcor, Barbara Baker, Taubman's vice president of investor relations, tells GlobeSt.com. Earlier this summer, the two firms crafted the deal that gave Macerich ownership of its seventh mall in metro Phoenix.

Taubman collected $51 million in cash, 705,663 Macerich partnership units and got out from under $77.4 million of property-level, fixed-rate debt, which was assumed by Macerich. In a press release, Taubman disclosed the immediate transfer of the Macerich units to the original group of unit-holders for Biltmore Fashion Park so it could redeem and retire more than 1.6 million of its partnership units.

"Biltmore just wasn't a strategic asset for us," Baker says of the disposition of one of the firm's last remaining Phoenix holdings. "We had an opportunity to get a very attractive price and a logical buyer and that was consistent with our strategy of recycling capital."

Taubman, which purchased the 90%-occupied center for $115 million in 1994, also holds 50% interest in the Arizona Mills Mall. Baker says the company has no plans to divest of that asset. The Bloomfield Hills, MI-based real-estate investment trust also owns or manages 31 urban and suburban regional shopping centers in 13 states.

Macerich's local portfolio contains more than eight million sf of gross leasable space that generates shop sales in excess of $420 per sf. "The timing of this acquisition is particularly opportune for Macerich since the Phoenix retail marketplace has enjoyed a very strong 2003 with comparable tenant sales in our Phoenix portfolio rising 6% in the third quarter alone," Coppola says in a press release. At closing time, Biltmore Fashion Park was generating about $470 per sf in sales.

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Taubman, Macerich Close $159M Biltmore Fashion Park Sale

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