SANTA MONICA, CA—The Macerich Co. has bought out its joint venture partner's 49% stake in five shopping centers, including four on the West Coast, for $1.89 billion including the assumption of $673 million in debt. The balance of the deal was the issuance of $1.22 billion in common stock to JV partner Cadillac Fairview Corp., a wholly owned subsidiary of the Ontario Teachers' Pension Plan Board.

The sale gives Cadillac Fairview a 10.9% ownership stake in Macerich. John Sullivan, Cadillac Fairview's CEO, is joining the retail REIT's board of directors. The OTPPB subsidiary and Macerich have had a JV relationship since 1999.

Totaling 6.7 million square feet, the properties include Lakewood Center in Lakewood, CA; Washington Square in Portland, OR; Los Cerritos Center in Cerritos, CA; Stonewood Center in Downey, CA; and Queens Center in New York City. The latter is the highest-grossing of the properties at $1,089 per square foot across 971,000 square feet; the largest of the five, the 2.1-million-square-foot Lakewood Center, is also the lowest grossing at $429 per square foot. The portfolio averages 97% occupancy.

“In a sector in which quality acquisition opportunities rarely present themselves, the opportunity to consolidate our ownership in these highly productive, market dominant centers through a stock-for-asset exchange represents a real opportunity to increase our overall portfolio quality and growth prospects,” says Art Coppola, chairman and CEO of Macerich.  “On a sales per-square-foot basis, Queens Center and Washington Square are currently our two most productive assets, both generating sales of over $1,000 per square foot while Los Cerritos Center, which is currently generating nearly $700 per square foot in sales and undergoing a $45-million expansion, represents the linchpin of our dominant South L.A. market position, along with Stonewood and Lakewood.”