04/06/2011

Simon Offering 4 Malls in Florida, Tennessee

In one of the largest retail offerings since the market downturn, Simon Property is marketing four malls in Florida and Tennessee that are carried on its books at a combined value of about $350 million.

Simon is shopping the 1.9 million square feet it owns at the properties, which encompass 3.7 million sf, including separately owned anchor stores. The malls have an overall occupancy rate of 91%.

The portion up for grabs includes 1.1 million sf of in-line space that is 82% occupied, some by temporary tenants presenting upside potential for a buyer. The eight anchor stores owned by Simon are leased. All but one of the 12 separately owned anchor slots are also occupied.

The Indianapolis REIT is pitching the offering as a portfolio, but will accept bids on individual malls. HFF has the listing.

Big mall trades have been extremely scarce in recent years. Just four transactions have exceeded $100 million since the downturn, according to Real Estate Alert's Deal Database. The biggest deal came in March 2010, when Simon paid $300.4 million to German fund operator KanAm for a 51% stake in a 2.5 million-sf portfolio of California properties.

The largest mall in Simon's listing is the 1.1 million-sf Boynton Beach Mall in Boynton Beach, Fla. Simon is offering 590,000 sf: 295,000 sf of in-line space that is 83% occupied, plus two anchors Sears (162,000 sf) and JC Penney (133,000 sf). The separately owned anchor stores are Macy's (220,000 sf), Dillard's Women (123,000 sf), Dillard's Men (99,000 sf) and Cinemark Theaters (70,000 sf). According to an SEC filing, Simon cited the carrying value of the investment as $130.9 million at yearend. The property is on 83 acres at 801 North Congress Avenue, near Interstate 95 in Palm Beach County's retail hub. It was built in 1985 and renovated in 2001. There are 5,400 parking spaces. Some 223,000 people live within five miles. The average household income is $73,000.

Also up for sale is 399,000 sf at the 754,000-sf Gulf View Square in Port Richey, Fla. The listing encompasses 234,000 sf of in-line space (82% occupied) and 165,000 sf of anchor space with three occupants: JC Penney (107,000 sf), Best Buy (32,000 sf) and TJ Maxx (26,000 sf). The separately owned anchors are Dillard's (144,000 sf), Sears (126,000 sf) and Macy's (85,000 sf). Simon's carrying value is $74.1 million. The mall, with 4,900 parking spaces, is on 61 acres at 9409 U.S. Highway 19, about 40 miles northwest of Tampa. It was built in 1980 and renovated in 1998. Some 122,000 people live within five miles. The average household income is $45,000.

Simon is offering 570,000 sf at the 970,000-sf Knoxville Center in Knoxville, Tenn. Its value on the REIT's books is $64.8 million. The listing encompasses 381,000 sf of in-line space that is 79% occupied and 189,000 sf of anchor space leased to JC Penney (135,000 sf) and Rush Fitness (54,000 sf). The separately owned anchors are Sears (180,000 sf), Belk (105,000 sf) and a vacant Dillard's (116,000 sf). The mall is on 48 acres at 3001 Knoxville Center Drive, five miles from the University of Tennessee. It was built in 1984 and renovated in 1997. There are 4,700 parking spaces. Some 98,000 people live within five miles. The average household income is $48,000.

Also up for grabs is 364,000 sf at the 847,000-sf Oak Court Mall in Memphis. Simon pegs the value at $82.2 million. The listing encompasses 188,000 sf of in-line space that is 89% occupied, a 50,000-sf anchor store leased by Dillard's Men and 127,000 sf of office space that is 83% leased. The separately owned anchors are Macy's (385,000 sf) and Dillard's Women (98,000 sf). The mall is on 16 acres at 4465 Poplar Avenue, less than a mile from the University of Memphis. It was built in 1988 and renovated in 1995. The office space was built in 1987. The property has 3,000 parking spaces. There are 235,000 people with an average household income of $57,000 living within five miles.

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