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Shopping Centers Today -> June 2002
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WILMORITE FLEXES MUSCLES
By Dave Bodamer
When Wilmorite Properties emerged as the buyer of trophy asset Tysons Corner Center, McLean, Va., in early May, the deal marked a milestone in the five-decade-old company’s history. The closely held, Rochester, N.Y.-based company said that buying the center marks the beginning of a new phase that will see it break out of its Northeast stomping grounds.
“This acquisition is a major step,” Wilmorite’s executive vice president, Mark R. Foerster, said.
The Tysons deal was made possible, in part, because of a restructuring Wilmorite undertook in 2000 when it became a private REIT. Before that, the company owned its 15 properties through various joint ventures. In 2000 it consolidated those ventures into a master partnership, which has now put it in a position to expand through acquisition.
Wilmorite is looking primarily at regional malls, although Foerster said it would consider power centers as well.
“We would look at assets that are pretty strong or that perhaps have outparcels or other collateral development opportunities nearby,” he said. “We would also look at properties where there is a redevelopment that needs to be done or property that could do better in upside and leasing effort.”
Wilmorite, which has been in the shopping center business since 1950, has a 17 million-square-foot portfolio that includes 13 regional malls and two open-air centers. Its best-known centers include Danbury (Conn.) Fair Mall and Freehold (N.J.) Raceway Mall. It develops, leases and manages its own properties and has an associated construction firm.
For the Tysons deal, Wilmorite formed a joint venture with Alaska Permanent Fund to buy the more than 2 million-square-foot center. The Alaska fund has owned 57 percent of the property since it opened in 1985; two unnamed institutional investors owned the rest. Under the joint venture agreement, Alaska will sell its own stake to Wilmorite and buy out the two other institutional investors.
The three investors have owned the mall through funds managed by L&B Realty Advisors, Dallas. The funds reached the ends of their contract lives last year, requiring L&B to liquidate them.
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