GREAT NECK, NY-Feldman Mall Properties has entered a $101.5-million joint venture with real estate investment-management firm Heitman, executives announced during their second-quarter earnings call. The deal is structured around Feldman's Colonie Center, a 1.3-million-sf, two-level mall in Albany.

Feldman is selling the mall to the joint venture for the $101.5 million, and it will retain a 25% ownership in the asset as well as perform the leasing and management of the center. Funds will be used to recapitalize a $50.7-million bridge loan on the asset and secure a $108-million construction loan. Feldman will also receive $38 million in cash as part of the transaction.

Feldman acquired Colonie Center in February of last year for $82 million. Boscov's, Christmas Tree Shops, Steve & Barry's and Sears anchor the mall. The property is undergoing a renovation that has included a new interior and junior-anchor tenants such as Barnes & Noble and Regal Cinemas.

Meanwhile, Larry Feldman, the company's chairman and chief executive officer, said that the acquisition climate is easing up, and he's seeing cap rates rising from 7% to 7.5%. "There is a lot of product for sale," he said. "There are deals to be had in some major markets, which is where we would focus our efforts." However, Feldman did not guarantee that his firm would make an acquisition by the end of the year.

Feldman's FFO during its second quarter, which ended June 30, totaled $3.4 million, or 23 cents per diluted share, up from $2.9 million during the same year-ago period. Net income came in at $19.7 million, compared to $205,000, due to the partial sale of its Foothills Mall, in Tucson, to Kimco Realty Corp. Locally based Feldman has interests in six malls across the country.