Los Angeles Firm Buys 49 Percent of Centers in Georgia, Minnesota and Texas Valued at More than $1 Billion Combined
CBRE Global Investors went on a shopping spree this week, acquiring stakes in super-regional malls in Georgia, Minnesota and Texas valued at more than $1 billion combined from real estate investment trust GGP, reflecting a bet that large enclosed malls have a strong future in high-growth markets.
The Los Angeles-based real estate asset management firm said Tuesday it acquired the portfolio, totaling 3.7 million square feet of retail, in a joint venture with Toronto-based Brookfield Property Partners, which is expected to close Tuesday on its acquisition of Chicago-based GGP. CBRE acquired a 49 percent stake in the malls, while Brookfield will own 51 percent through its ownership of GGP.
The three malls in the portfolio – valued at more than $1 billion combined – are Cumberland Mall, a 1 million-square-foot regional center just northwest of Atlanta; Ridgedale Center, a 1.2 million-square-foot mall in western Minneapolis; and The Parks Mall at Arlington, a 1.5 million-square-foot mall between Dallas and Fort Worth.
The move by CBRE Global Investors, an affiliate of global services firm CBRE, comes as retail analysts debate the viability of enclosed “fortress” malls. The growing popularity of online shopping and open-air centers in mixed-use communities have posed a legitimate threat to regional malls. But CBRE said malls in the right locations make for a good investment.
“Class A super-regional malls remain one of the most attractive investments available today,” said David Morrison, CBRE Global Investors’ chief investment officer for the Americas. “These assets have a historic track record of material outperformance, dominating their retail catchment within their submarkets, and we expect that assets of this quality and scale should maintain that advantage going forward.”
The malls acquired by the CBRE/Brookfield joint venture are 98 percent leased “to a strong mix of national/regional retailers, including a number of high-quality experiential retailers,” CBRE Global Investors said.
GGP’s leasing and operations teams will keep marketing and managing the properties. CBRE Global Investors made the acquisition on behalf of its institutional investor clients.
