Shopping Centers Today

MAR 2017

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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8 S C T / M A R C H 2 0 1 7 D E A L S T H E C O M M O N A R E A U.S. RETAIL PROPERTY MARKET $170 million Macerich sold the 595,000-square- foot Cascade Mall, in Burlington, Wash., and the 731,800-square- foot Northgate Mall, in San Rafael, Calif., to Merlone Geier Partners D E A L B A R O M E T E R W H O ' S P A Y I N G H O W M U C H F O R W H A T $9.2 million Forest City Realty Trust sold the 116,000-square- foot Shops at Bruckner Boulevard, Bronx, N.Y., to Urban Edge Properties. Conway, Danice, and Marshalls are tenants $13.4 million M&J Wilkow and Alto Real Estate Funds bought The Shoppes at College Hills and The Plaza at College Hills, a 442,000-square- foot open-air regional complex in Normal, Ill., from Miller Capital $32.3 million Phillips Edison bought the 153,100-square- foot Palmer Town Center, in Easton, Pa., from 37 TIC owners. Giant Foods and Marshalls anchor the property $34.5 million San Diego–based CIRE Investments Park West, a 46- acre mixed-use center in Peoria, Ariz., anchored by a 14-screen Harkings Theatre, from Park West LLC and The Howard Hughes Corp. $37.5 million Cole Capital bought Fountain Square, a 188,000-square- foot center in Brookfield, Wis., whose tenants include Bed Bath & Beyond, Cost Plus World Market and Golfsmith, from Continental 64 Fund $51 million Publix bought three Publix-anchored centers totaling 295,600 square feet: Magnolia Plaza (Panama City, Fla.), Palmer Ranch (Sarasota, Fla.) and Magnolia Place (Daphne, Ala.), from a private equity firm O ne company's excess baggage can be another's golden opportunity, as shown by Macerich's recent deal to sell two malls to privately held landlord Merlone Geier Partners for a combined $170 million. The Santa Monica, Calif.– based REIT is on a mission to shed properties that perform below certain sales thresholds, and the Burlington, Wash., Cascade Mall and the San Rafael, Calif., Northgate Mall were not hitting the mark. As of Sept.30, 2016, Cascade and Northgate generated sales per square foot of $319 and $421, respectively, and had occupancy rates of 86.5 percent and 94.9 percent, respectively. These figures compare to Macerich portfolio averages of $626 per square foot in sales and 95.3 percent occupancy at Sept. 30, 2016. Merlone Geier Partners plans to reinvest in the properties to make them more profitable, something Macerich was not prepared to spend its money on. "We are pruning our portfolio and in many times putting the properties into the hands of buyers that can focus on it in a more entrepreneurial way than we have," said Arthur Coppola, Macerich's chairman and CEO, on an earnings call with investors. This transaction resulted in net proceeds to Macerich of approximately $100 mil- lion after the repayment of a floating-rate note on Northgate. n 50 bp's 12-month change in total vacancy 1% 12-month net absorption (% of inventory) 0.6% 12-month comple- tions (% of inventory) 2.8% 12-month rent growth (psf) To each his own U.S. RETAIL INVESTMENT $64.3 Investment sales (YTD, $billions) -18.7% YTD investment sales growth 4.4% Average cap rate -37bp's 12-month change in cap rate Source: JLL

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