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FAO TO CLOSE STORES

FAO Inc., the company that owns toy retail chains FAO Schwarz, The Right Start and Zany Brainy, says it will close up to 70 stores by the end of March. The company announced at the height of the holiday shopping season that it was facing a liquidity crisis and told lenders it could go into bankruptcy if they did not “relax recently imposed borrowing restrictions.” Approximately 55 Zany Brainy stores will close; FAO gave no estimations for the other brands. All three concepts have been hurt by the lower prices offered by such discount rivals as Wal-Mart, analysts say.

WESTFIELD SELLS STAKE IN GARDEN STATE PLAZA

Westfield America Trust sold a 25 percent stake in Westfield Shoppingtown Garden State Plaza, Paramus, N.J., to a U.S. affiliate of British insurer and fund management firm Prudential plc. Westfield in turn bought a 50 percent share in Fashion Square Sherman Oaks (Calif.) from Prudential for $67 million. Prudential paid Westfield $193.8 million for the Garden State Plaza stake and has an option to increase its investment.

DALLAS GALLERIA CHANGES HANDS

Houston-based Hines sold its last remaining retail asset, Dallas Galleria, to UBS Realty Investors, an arm of Swiss financial services firm UBS. Neither the privately owned Hines nor UBS revealed the price of the 1.8 million-square-foot super-regional mall, but according to the Dallas Business Journal, it was close to $300 million. General Growth Properties will manage the mall.

WEINGARTEN, AEW FORM JOINT VENTURE

In a continuing drive to broaden its base in the Southern United States, Houston-based Weingarten Realty Investors formed a joint venture with AEW Capital Management, an investor in real estate for pension funds. The partnership will yield a $238 million acquisition pipeline to Weingarten, which owns 298 community centers in the region.

INLAND RETAIL EXPANDS

Inland Retail Real Estate Trust continues to grow, with $1 billion in acquisitions under contract set to close in the early part of this year. Recently, the Oak Brook, Ill.-based company paid $160 million for nine community centers in the U.S. Southeast, totaling 1.3 million square feet. Inland Retail, which is part of the privately owned Inland Real Estate Group of Companies, now has 103 Southeast community centers in its portfolio. The Inland companies formed Inland Retail in 1999 specifically to buy centers in the rapidly growing region. Another of the Inland companies, Inland Real Estate Corp., owns about 130 community centers in the Midwest.

GUTTMAN RESIGNS FROM FEDERAL

Steven Guttman has resigned as chairman, CEO and trustee of Federal Realty Investment Trust. Guttman had been under increasing pressure from analysts and shareholders over construction costs on the Santana Row mixed-used project in San Jose, Calif., which was partly destroyed by a fire in August. The company has appointed Donald C. Wood CEO and trustee. Wood joined Federal Realty in 1998 as CFO. He became senior vice president and COO in 1999 and was named president in 2001.