Simon Purchases Two Taubman Properties

Simon Property Group has acquired land in Syosset, N.Y., and a 50 percent interest in Arizona Mills in Tempe from the Taubman Centers for $60 million and 555,150 partnership units in Simon Property Group L.P.

TAUBMANSimon Property Group has acquired land in Syosset, N.Y., and 50 percent interest in Arizona Mills, a retail development in Tempe, Ariz., from the Taubman Centers, Inc., for $60 million and 555,150 partnership units in Simon Property Group Ltd. Partnership.

As part of the sale, Taubman was relieved of its $84 million share of the current $167 million mortgage loan on Arizona Mills, bringing the transaction’s total value to $230 million.

“In Syosset, it became clear to us that we would not be able to move forward anytime soon with the development of The Mall of Oyster Bay. It made sense to pursue a sale of the property to allow us to redirect our resources,” Barbara Baker, Taubman’s vice president, corporate affairs & investor relations, told Commercial Property Executive. “The sale of Arizona Mills is consistent with our strategy to recycle capital for growth.”

The Long Island property represents 39 acres of land and site improvements at the northeast corner of the Long Island Expressway (I-495) and Robbins Lane.

In a company call with analysts, David Simon, Simon Property’s CMO, said the company was looking forward to working with the town of Oyster Bay to come up with a new development plan.

Arizona Mills, located at the intersection of I-10 and U.S. 60, is the largest outlet and value retail shopping destination in Arizona. The center, which opened in 1997, was developed in partnership by Taubman, The Mills Corp., and Simon. Upon closing, Simon will own 100 percent of Arizona Mills.

According to Baker, it’s part of Taubman’s strategy to recycle capital for growth and both these transactions fit into that philosophy. Although as a developer it is always looking at new opportunities, she said currently it has no other deals to announce.

It’s been a busy time for Taubman, who last week sold a 49.9 interest in International Plaza, a retail center in Tampa, to a joint venture of TIAA-CREF and APG for $499 million. The deal consisted of $337 million in cash and approximately $162 million of beneficial interest in debt.

The 1,202,000 square foot center, which opened in September 2001, is anchored by Dillard’s, Neiman Marcus, and Nordstrom. Taubman will continue to lease and manage the center.

“We’re delighted to align ourselves with two great institutional partners,” Robert Taubman, Taubman’s chairman, president, & CEO, said in a company release. “This transaction strengthens our balance sheet and highlights the extraordinary growth of this powerhouse asset.”