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Shopping Centers Today -> June 2003
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PASSCO REAL ESTATE EYES REGIONAL MALLS
Passco Real Estate Enterprises, which specializes in buying properties for 1031 exchange transactions, is moving away from the increasingly expensive grocery-anchored shopping center and investing nearly $1 billion in mid-size regional malls.
“Malls are a little less pricey in terms of cap rates,” said Passco COO William Winn.
The Santa Ana, Calif.-based company says it is assembling a $500 million portfolio of these this year, with perhaps an additional $400 million worth next year. Thereafter, it plans to acquire about two malls per year.
At press time Passco said it was close to finalizing the purchase of the 1.2 million-square-foot Puente Hills Mall, City of Industry, Calif., for $148 million and had other deals in the works as well. Passco has an existing retail portfolio of grocery-anchored shopping centers and power centers valued at $300 million.
Whether Passco holds onto its new acquisitions or earmarks them for 1031 exchanges depends on the condition of the properties, Winn says.
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