CHATTANOOGA, TN-Locally based CBL& Associates Properties Inc. is following through with a strategically planned disposition of five shopping centers in four states totaling 1.3 million sf to Galileo America LLC. The $106.5-million price equates to $81.92 per sf and represents a cap rate of 7.5%. The deal is scheduled to close in May.
Sale proceeds will be used in a 1031 like-kind exchange for the Layton Hills Mall in Layton, UT, acquired by CBL in November 2005, says CBL president Stephen Lebovitz.
"We are pleased to enter into the final phase of our relationship with Galileo, which will allow us to reap significant tax savings from deploying the proceeds into a 1031 exchange," Lebovitz says in a prepared statement. "This transaction firmly illustrates our commitment to maximizing value for our shareholders."
The properties are the Wilkes-Barre Township Marketplace in Wilkes-Barre Township, PA; Springdale Center, Mobile, AL; Fashion Square, Orange Park, FL; Cobblestone Village at Royal Palm, West Palm Beach, FL; and Chicopee Marketplace, Chicopee, MA. The Pennsylvania and Alabama properties were priced at $63 million and are part of the total sale price of $106.5 million.
Galileo America LLC was formed in late 2003 by CBL and Galileo America Inc., a US-based REIT owned by Galileo Shopping America Trust, an Australian limited property trust, according to industry sources. At that time, CBL contributed 90% of its ownership interest in 51 power and community centers to the trust in a deal valued at about $516 million.
CBL owns, holds interests in or manages 132 retail properties, including 79 regional malls and open-air shopping centers. The properties are in 27 states and total 74.2 million sf, including two million sf of non-owned shopping centers managed for third parties. CBL has nine projects under construction totaling 2.1 million sf., including Phase II of Gulf Coast Town Center in Fort Myers, FL; two open-air centers; a community center; two associated centers and three expansions. The company has regional offices in Waltham, MA and Dallas.
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