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BALTIMORE-Retail outlet center REIT Prime Retail Inc. has committed to selling its Prime Outlets of Puerto Rico property for approximately $36.5 million. Part of the net proceeds from the deal will be used to cover the company’s principle-prepayment requirement of $12 million for December 2002 on its mezzanine loan, which has an outstanding balance of $31.1 million.

Prime Retail officials announced earlier this month that it had modified the terms of the loan with lenders FRIT PRT Lending LLC and Greenwich Capital Financial Products Inc. The deal, which also includes a non-recourse mortgage with an outstanding balance of just over $19 million, is scheduled to close before the end of the fourth quarter. Prime Retail will likely stay involved with the property through its management, marketing and leasing activity for profit.

Located in Barceloneta, the Puerto Rico property consists of 176,000 sf of retail space among 37 stores and features additional out-parcels currently under development for non-outlet retail purposes. The property is capable of being expanded to a total of 450,000 sf. The village-style shopping center made its debut in the summer of 2000 and was the first outlet center to open on the island.

While the property was Prime Retail’s only outlet outside of the US, company officials say the selling of the company’s one non-domestic outlet is not indicative of a desire to focus on properties solely within borders of the US. “The potential sale of Prime Outlets Puerto Rico is not part of a strategy to move out of the market,” a Prime Retail spokesman tells GlobeSt.com. “Prime Outlets Puerto Rico is an excellent center, and a sale of this asset makes financial sense for Prime Retail at this time.”

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