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Shopping Centers Today -> November 2000
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| 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 Sept. 29, the regional mall index is at 112.99, up 3.2%; the strip center index(including power, neighborhood and community centers) is at 112.51, up 1.5%; and the factory outlet index is at 62.74, up 2.4%. The index is updated monthly. |
TRANSACTIONS
Security Capital Group
buys affiliated company
Security Capital Group agreed to buy its affiliate SC-U.S. Realty for $1.4 billion in an effort to simplify the relationship between the companies. SC-U.S. Realty owns stakes in six different REITs, including City Center Retail Trust, Urban Growth Property Trust and Regency Realty. Under the terms of the deal, SC-U.S. Realty would get 1.15 shares of Security Capital’s class B common stock. Security Capital gets SC-U.S. Realty’s assets and will assume the company’s liabilities.
CalPERS venture
buys First Washington Realty
U.S. Retail Partners, a joint venture of the California Public Employees’ Retirement System (CalPERS) and National Retail Partners, bought strip center REIT First Washington Realty Trust for $800 million. Bethesda, Md.-based First Washington, which owns 63 neighborhood shopping centers throughout the Mid-Atlantic and the greater Chicago and Milwaukee metropolitan areas, will adopt a plan of liquidation by merging its assets into two CalPERS-related entities. CalPERS will pay $26 per share of First Washington common stock in cash, a premium of 25.3% over the REIT’s closing price of $20.75 the day before the deal was announced. Completion of the transaction, which is expected to occur in January 2001, is subject to approval by First Washington stockholders and limited partners.
JPMIM, NYSTRS invest $250M in Edens & Avant
J.P. Morgan Investment Management (JPMIM) and the New York State Teachers’ Retirement System (NYSTRS) each have invested $125 million of growth capital in strip center operator Edens & Avant. The two funds join State of Michigan Retirement System as the three largest investors in the company. JPMIM and NYSTRS gained a combined 30% ownership stake in the company as part of the transaction.
Unsolicited bidder makes play for TrizecHahn shares
TRC Capital Corp. made an unsolicited tender offer to purchase up to 5 million subordinate voting shares of TrizecHahn at C$22.65, less than the market price of the shares. TrizecHahn stressed that it is not associated with the offer or with TRC Capital. The company is a Toronto-based private investment firm that in the past year alone has made similar unsolicited, below-market offers for other Canadian companies. TRC Capital President told Canada’s National Post that his company is looking at TrizecHahn as a long-term investment and has no interest in going for a controlling stake. The 5 million shares represent only 3% of the total outstanding shares of TrizecHahn.
DEAL OF THE MONTH
Cleveland-based 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), which said last month that it would liquidate its assets rather than sell to its unwanted suitor, Schottenstein Stores. DDR affiliate DDR Real Estate Services will assist BPP in its liquidation effort.
The deal, which involves centers in the San Francisco area, Southern California, Washington and Oregon, would bring 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. BPP’s plan is backed by its two largest shareholders, Westbrook and Blackacre. 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 combined area of 3.7 million square feet.
Moreover, Jay Schottenstein, who backed three unsuccessful takeover bids of Burnham, was named cochairman of the REIT’s board of directors. According to the agreement that places Schottenstein on Burnham’s board, members of the Schottenstein group, who own approximately 9.8% of Burnham’s common stock, have agreed to support the liquidation plan and director nominees.
 | Current Issue December 2008 |