NEW YORK CITY AND CHATTANOOGA, TENN. — TIAA-CREF and CBL & Associates Properties, Inc. (NYSE: CBL), have closed their $1.09 billion real estate joint venture to invest in market dominant shopping malls, originally announced in May 2011. As part of the joint venture, TIAA-CREF has completed its investment in four of CBL’s market dominant shopping malls: Oak Park Mall in Kansas City, Kan.; West County Center in St. Louis; CoolSprings Galleria in Nashville, Tenn.; and Pearland Town Center in Pearland, Texas. Eastdil Secured acted as CBL’s exclusive financial advisor in arranging this joint venture.
“With the ongoing disconnect in public versus private market valuations, we believe this transaction provides us with the most advantageous source of monetizing the equity value in our portfolio,” said Stephen Lebovitz, CBL’s president & chief executive officer, in a statement. “TIAA-CREF’s investment strengthens our balance sheet and partners us with a well-capitalized institution to pursue new opportunities.”
Specifically, CBL reduced outstanding debt balances by approximately $486 million through TIAA-CREF’s assumption of approximately $267 million of property-specific debt and cash proceeds of approximately $219 million. TIAA-CREF received a 50 percent pari passu interest in the three enclosed malls, including Oak Park Mall, West County Center and CoolSprings Galleria, and a 12 percent interest in Pearland Town Center. CBL continues to manage and lease the properties.
As of as of June 30, 2011, TIAA-CREF has $17 billion of properties in the office, retail, industrial and multifamily sectors across the U.S., Canada, and Western Europe.
“We believe dominant regional malls are an important part of a well-diversified real estate portfolio, and this investment alongside CBL allows us to expand our presence in this sector,” said Philip McAndrews, managing director and head of global real estate transactions and joint ventures, TIAA-CREF. “This investment in super regional malls with CBL is part of our strategy to invest in assets that provide durable income streams with enduring long term values.”
Property specifics are as follows:
Oak Park Mall: A more than 1.5 million square-foot mall featuring four department stores — Dillard’s, Macy’s, JCPenney and the area’s only Nordstrom — as well as more than 185 specialty stores and restaurants. Specialty stores include American Girl, Arden B., Banana Republic, Bare Escentuals, bebe, Chico’s, Coach, Lacoste, LUSH, Naartjie Kids, Puma, Sephora, Teavana, White House Black Market and XXI. Several restaurants are located on the mall periphery including Cheddar’s Casual Cafe, Mimi’s Cafe, On The Border and Outback Steakhouse.
West County Center: A 1.3-million-square-foot superregional mall anchored by Missouri’s only Nordstrom as well as Macy’s, JCPenney and Barnes & Noble. The mall is located at the intersection of I-270 and Manchester Road (Hwy 100). West County Center was originally built in 1969 and underwent a $230 million redevelopment in 2002 adding Nordstrom, three parking structures and a new food court in the process. In 2009, CBL redeveloped the former Lord & Taylor store into an open-air wing anchored by Barnes & Noble and featuring restaurants including Bravo!, McCormick & Schmicks and specialty retailers such as NorthFace and XXI.
CoolSprings Galleria: A more than 1 million square-foot super-regional shopping center anchored by Belk, Dillard’s, JCPenney, Macy’s and Sears. The mall is located 15 miles south of Nashville. The shopping center features more than 150 specialty stores including Bare Escentuals, Banana Republic, Coldwater Creek, Johnston & Murphy, Pottery Barn, and Williams-Sonoma.
Pearland Town Center: Pearland Town Center includes retail, residential, office and hotel space in an open-air, pedestrian-friendly environment. Located at FM 518 and Highway 288, the center features a 718,000-square-foot open-air lifestyle center anchored by fashion department stores Dillard’s and Macy’s, as well as Barnes & Noble, plus a wide selection of retailers and restaurants including Coldwater Creek, Eddie Bauer, BJ's Restaurant & Brewhouse, Aéropostale, Pac Sun, and more. A 110-room, four-story Courtyard by Marriott hotel is located above the center’s retail shops near Macy’s. In addition, Pearland Town Center offers office and multifamily above the retail, a 25-acre lake, and walking paths and parks.
— Dan Marcec