TALLAHASSEE, FL-The 25-year-old, 963,000-sf, 96.8%-leased Tallahassee Mall--the oldest shopping center in Florida's capital--is under new ownership today. Feldman Mall Properties Inc. of Great Neck, NY paid Tallahassee Mall Partners Inc. $61.4 million or a below-replacement cost of $63.86 per sf. The deal closed June 29 and was first reported by GlobeSt.com May 7.
The cash-debt deal includes Feldman assuming an existing mortgage loan of about $45.3 million and paying the seller $16.1 million in cash, according to Feldman's prepared statement. The New York company expects an initial yield on its investment of about 7.9%, based upon the in-place operating income for 2005, according to Tom Wirth, Feldman's chief financial officer.
The acquisition was funded with proceeds from a six-month first mortgage bridge loan financing, collateralized by the Feldman-owned Colonie Center, a 1.25-million-sf, 120-store regional shopping center in Albany. The Tallahassee property is under a long-term ground lease that expires 2063.
The acquisition price includes ownership of all anchors and shops. The mall's four major anchor tenants are AMC Theaters, Dillard's, Parisian and Burlington Coat Factory. AMC's 20-screen stadium seating theater is the only one of its kind in the Tallahassee market.
Additionally, "the mall contains a remarkably strong roster of seven big-box junior anchor tenants such as Old Navy, Sports Authority, Goody's, Ross Dress for Less, Shoe Carnival, Barnes & Noble and Guitar Center," according to Larry Feldman, the company's CEO.
Excluding anchor tenants and temporary tenants, the shop occupancy is 68.4%, Feldman says. However, including temporary tenants, the shop occupancy goes to 84.8%. "The sales trends at Tallahassee Mall are positive, with shop sales growing around 6% per annum and averaging about $325 per sf," according to Feldman.
With the completion of the Tallahassee Mall deal, together with the anticipated closing of the Northgate Mall acquisition in Cincinnati, the company's portfolio, including non-owned anchor tenants, will comprise six regional malls totaling about 6.2 million sf, Feldman says.
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