Simon Picks up 93 Acres for Nearly $27M

PANAMA CITY, FL-In one of the largest retail-related land deals in Florida this year, Simon Property Group of Indianapolis has purchased about 93 prime acres at Pier Park here from Jacksonville, FL-based St. Joe Co. for $26.5 million or $286,000 per acre ($6.57 per sf). Simon's plans for the land were not disclosed, but area brokers tell GlobeSt.com a mega-sized regional mall could be on the developer's horizon because none exist in the Florida Panhandle near the Georgia border.

Under terms of the deal, Simon retains an option to purchase up to an additional 125 acres in and near Pier Park, a nationally known recreational area in Northwest Florida. St. Joe will retain about 13 acres on the north side of front Beach Road for future complementary development.

"Simon brings an enormous strength and talent to Northwest Florida that can help make Pier Park an exciting shopping, restaurant and entertainment destination," says St. Joe chairman and CEO Peter S. Rummell. "We expect this transaction at Pier Park to further increase the awareness of the opportunities in Panama City Beach, Bay County and Northwest Florida."

Rummell, a former Walt Disney World executive, adds: "Interest in this region continues to improve rapidly as the area receives increasing interest from the national retailers and an influx of Baby Boomer residential and resort buyers."

Kevin M. Twomey, St. Joe president, chief operating officer and chief financial officer, says "demand and pricing for Florida resort and primary residential real estate continued to show strength throughout the year." He says St. Joe "continues to see excellent results from land sales and (its) commercial real estate services" division.

Twomey adds that with the completion of the Simon transaction, St. Joe is raising its full-year 2004 earnings guidance. "We now expect the percentage increase of our 2004 earnings, before conservation land sales gains, over the 2003 baseline earnings per share of 80 cents to be in the high 30s or more. As always, our guidance reflects closings we expect to occur before the end of the year. Changes in closing schedules could affect the ultimate result."