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Buying & Selling

By Edmund Mander

Source: Salomon Smith Barney.

The Retail REIT Index was designed for Shopping Centers Today. The stock price movements were calculated starting at a base of 100 on Dec. 31, 1995. For the period ending Aug. 31, the regional mall index is at 108.91, down 7.2%; the strip center index (including power, neighborhood and community centers) is at 112.56, down 4.6%; and the factory outlet index is at 61.28, down 9.9%. The index is updated monthly.

Transactions

Burnham Pacific to sell 15 centers to DDR
Developers Diversified Realty Corp. (DDR) plans to buy 15 West Coast strip centers for about $355 million from San Diego-based Burnham Pacific Properties (BPP). The deal, which involves centers in the San Francisco area, southern California, Washington and Oregon, would bring Cleveland-based DDR’s portfolio to 221 centers in 41 states.

With the exception of the sale of two assets, the transaction, which has been unanimously approved by BPP’s board of directors, is subject to the approval of BPP’s shareholders. Fourteen of the centers would be acquired in a joint venture with Prudential Real Estate Investors and investment fund manager Coventry Real Estate Partners. The portfolio contains a mix of community centers, neighborhood centers and specialty centers with a combined area of 3.7 million square feet. “This is an extraordinary opportunity to utilize our access to private capital to selectively acquire a portfolio of assets in a clean, efficient transaction,” DDR Chairman and CEO Scott Wolstein said in a prepared statement.

The agreement closely followed BPP’s announcement that it would liquidate its assets rather than sell to its unwanted suitor, Schottenstein Stores.

Mills sells community center portfolio
The Mills Corp. has finally found a buyer for its 11 community shopping centers, remnants from its days as Western Development, before its trademark outlet/entertainment business had taken off. The centers, with a combined area of 2.2 million square feet, will be sold for $169.2 million, netting Arlington, Va.-based Mills approximately $40 million that it will funnel into its developmental pipeline. The buyers have been identified as various affiliates of the Stolz Management Group, Wilmington, Del.

Gazit buys Centrefund
Gazit Acquisition Group bought 10.8 million shares of Canadian neighborhood shopping center company Centrefund Realty Corp. for C$131 million ($96 million). The deal gives Gazit 84% of Centrefund’s outstanding common shares.

American Eagle Outfitters absorbs Dylex divisions
American Eagle Outfitters has agreed to buy the assets of Canadian retailer Dylex’s Thriftys, Braemar and National Logistic Services divisions for C$110 million ($74 million) in cash, subject to final negotiation of a definitive purchase agreement. Thriftys is a 115-store specialty retailer of casual apparel carrying the Bluenotes label (similar to American Eagle). Braemar is a women’s ready-to-wear clothier with 57 locations. National Logistics Services is a warehouse and distribution operation. Dylex will retain control of its BiWay, Fairweather and Labels chains.