Macerich Does "Super-Regional" JV

 
The Macerich Company (MAC - Analyst Report), a leading real estate investment trust (REIT), has recently formed a joint venture with GI partners, a trans-Atlantic private investment firm, at Flatlron Crossing Mall in Broomfield, Colorado.

Spread across 1.4 million square feet, Flatlron Crossing Mall is a super-regional mall anchored by retail giants like Nordstrom, Inc. (JWN - Snapshot Report), Macy’s Inc. (M - Snapshot Report), Dillard’s Inc. (DDS - Snapshot Report) and Dick’s Sporting Goods Inc. (DKS - Snapshot Report). Retail shopping centers spanning over 800,000 square feet of gross leaseable area are generally referred to as "super-regional" shopping centers.

Macerich focuses on leasing regional and community shopping centers throughout the U.S. The company focuses on high barrier-to-entry markets and operates through its limited partnership, The Macerich Partnership, L.P., in which it holds an 87% stake. Currently, Macerich owns or has a managing interest in 72 regional shopping centers totaling approximately 75 million square feet of gross leasable area.

With the continued economic downturn, Macerich has decided to increase its liquidity through asset sales to JVs or disposal of non-core assets. Under the terms of the deal associated with the Colorado mall, Macerich received $116 million in net cash, which was primarily utilized to de-lever its balance sheet.

On the other hand, GI Partners acquired a 75% ownership interest in a premier shopping center like Flatlron Crossing Mall. The mall has significant upside potential with annual tenant sales of $443 per square foot in 2008, and an occupancy rate of 97% at present. GI Partners would further aim to capitalize on its expertise to increase the profitability of the mall through prudent investment decisions.