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LOUISVILLE, KY-Rouse Co. has paid a premium to buy out the ownerof a competing mall here located across Interstate 264 from itsMall St. Mathews. The Maryland-based mall owner paid $123 millionin cash and assumed debt for the 930,000-sf development known asOxmoor Center Mall. The seller was D. Talmage Hocker, president ofDavid Hocker & Associates Inc., a locally based private retailowner and developer. Oxmoor is anchored by Von Maur, Lazarus, Searsand Galyans. In total, the mall generates $230 million in annualsales with in-line stores generating nearly $400 per sf in sales.Notable in-line tenants include Coach, Pottery Barn Kids, SharperImage, Coldwater Creek, Brighton Collectables, Mimi Maternity andCalifornia Pizza Kitchen. "Oxmoor and Mall St. Matthews are the twobest malls in Louisville, with combined sales of $450 to $500million," says Hocker. "Rouse will now dominate the market and willachieve economies of scale in leasing and operations." Executivesof Granite Partners, which brokered the sale for Hocker, say Oxmoorhad outflanked Rouse by adding Von Maur, a Midwestern version ofNordstrom, and several upscale complimentary retailers, while MallSt. Matthews recently lost its Lord & Taylor anchor. GerryMason, executive managing director of Granite Partners, says thepricing was extremely strong for a secondary market mall. "The caprate was below 6 %, reflecting strong market fundamentals andRouse's desire to solidify its position in Louisville," says Mason."Normally, only trophy malls are able to deliver cap rates in the 5to 6 % range." Granite managing director John Williams tellsGlobeSt.com that Rouse will be able to quickly and significantlyraise the property's net operating income by combining the malls'operations, thereby raising its capitalization rate on theinvestment. In a conference call with investors, Rouse executivessaid Oxmoor's rent amounts to 9.4% of its sales and St Mathews'rent amounts to 12% of sales. Without having to compete for tenantswith Hocker, the executives said both malls should be up to thecompany average of 14% within two years. Rouse said in August thatit expected to finance the Oxmoor acquisition by assuming $60million in mortgage debt and paying $63 million in cash from itsrevolving credit facility and/or other borrowings. The company,which will merge into General Growth Properties in a matter ofdays, was not immediately available for comment Wednesdayafternoon.