August 3, 2015
On June 1, 2015, the Company completed a joint venture transaction with O’Connor Capital Partners (“O’Connor JV”) with respect to the ownership and operation of five of WP Glimcher’s malls and certain related out-parcels, which are valued at approximately $1.625 billion. This pricing implies an approximate 5.25% capitalization rate on in-place NOI.
O’Connor Capital Partners holds a 49% ownership interest in the joint venture and WP Glimcher retained a 51% ownership interest. The five malls in the joint venture are: The Mall at Johnson City in Johnson City, Tennessee; Pearlridge Center in Aiea, Hawaii; Polaris Fashion Place® in Columbus, Ohio; Scottsdale Quarter® in Scottsdale, Arizona; and Town Center Plaza (which consists of Town Center Plaza and the adjacent Town Center Crossing) in Leawood, Kansas. WP Glimcher leases and manages the properties.
In exchange for its interest in the venture, O’Connor Capital Partners paid 49% of the aggregate value of the properties, less the mortgages secured by such properties, at closing, plus costs spent to date on the Phase III development at Scottsdale Quarter, subject to certain adjustments as set forth in the purchase agreement. Prior to the closing of the O’Connor JV, the Company replaced the debt on Pearlridge Center and Scottsdale Quarter with $390 million of new nonrecourse, 10-year permanent financing with a rate of 3.5% on both loans. The O’Connor JV generated net proceeds of approximately $432 million to the Company after taking into account the assumption of debt and estimated closing costs. The proceeds were used to repay a portion of the bridge loan that the Company used to finance the Glimcher merger.