Goldman Sachs' Merchant Banking division and two investment partners have agreed a deal to buy the 1.3 million square foot South Towne Center in Sandy near Salt Lake City in Utah, for around $205 million.
The deal is thought to represent the first equity investment in a US mall by Goldman since the onset of the 2008 global financial crisis.
The transaction also can be seen as an example of private real estate investors finding value in regional markets, sector-specific plays and development at a time when there are few distressed opportunities remaining in US real estate.
According to sources, Goldman's partners in the acquisition are Silverpeak Real Estate Partners, the private investment firm created in May 2010 by the former management of Lehman Brothers Real Estate Partners, and California-based Pacific Retail Capital Partners.
Owner of the center, Macerich Companies, has already agreed to sell the asset with completion expected to take place next month, said those with knowledge of the situation.
Macerich is a Santa Monica-headquartered REIT that is quoted on the New York Stock Exchange. With about 50 malls valued at $9 billion on its books it is one of the largest owners of regional and community shopping centers in the US.
In December 2012, Reuters reported how Macerich had put up for sale 17 “non-core Class B” malls via broker Eastdil Secured, with The South Towne Center being one of them.
The South Towne Center is located in an affluent area around 15 miles south of Salt Lake City, at the base of roads leading to major ski resorts of Alta and Snowbird and was constructed in 1986. The asset itself is said to have the potential for major capital improvements.