Macerich to Pick Up Two Malls for $1.3B
By Barbra Murray, Contributing Editor
It’s a one-stop shopping binge. The Macerich Co. has signed a deal to acquire two New York retail properties, the Green Acres Mall and the Kings Plaza Mall, from Vornado Realty Trust for a total of $1.25 billion. The purchase will add an aggregate 3 million square feet to Macerich’s portfolio.
Macerich will fork over $500 million for the 1.8 million-square-foot Green Acres in Valley Stream, Long Island. Vornado came into possession of Green Acres in 1997 when it merged with Arbor Realty Trust, which had counted Green Acres as its sole asset, in a $225 million transaction. Located roughly 20 miles outside of Manhattan, the super-regional mall presently boasts an occupancy level of 94 percent.
Macerich’s other planned purchase, the 1.2 million-square-foot Kings Plaza in Brooklyn, comes with a price tag of $751 million and a tenant roster that is 95 percent full. The REIT will acquire the retail center from Alexander’s Inc., a 32.4 percent affiliate of Vornado. The property has been part of Alexander’s portfolio since 1992.
Payment for both assets will come in the form of debt that Macerich plans to obtain at the closing of the transactions, as well as cash on hand and borrowings under the REIT’s line of credit. Macerich closed on a new $1.5 billion unsecured credit facility in May 2011.
For Vornado’s part, the transaction will meet one of the company’s recently stated goals and then some. “In the second half of the year, we are contemplating the sale of over $1 billion of assets, including the beginning of the mall disposition program and continuing the pruning of our strip center portfolio,” Michael Fascitelli, Vornado president and CEO, said during the REIT’s second quarter earnings call in August. At the time, Fascitelli noted that Green Acres, Kings Plaza and the 650,000-square-foot The Plant in San Jose, Calif., were part of the program.
If all goes as planned, Green Acres and Kings Plaza will come under Macerich’s ownership in the first quarter of 2013 and the fourth quarter of 2012, respectively.