Heitman acquires stake in Macerich malls

The real estate investment firm has paid $167.5m for a 49.9% interest in two Macerich malls in New Jersey and Arizona. GI Partners closed a similar deal last month, with plans to target other REITs in need of recapitalisation.

Heitman has paid $167.5 million for a stake in two malls owned by troubled retail REIT Macerich.

Heitman bought a 49.9 percent stake in the Freehold Raceway Mall in New Jersey and the Chandler Fashion Center in Arizona, Macerich said in a statement. Heitman will also assume a pro rata share of the property debt. The deal was made through Heitman's North American core open-ended fund.

Today's news follows hot on the heels of GI Partners buying a 75 percent stake in one of Macerich’s super regional malls in Denver. The private equity shop bought the 1.4 million-square-foot mall for $116 million in cash, assuming $136.5 million of the $182 million mortgage, according to media reports. Macerich bought the centre for $316.6 million in 2003, data provider Real Capital Analytics said.

In the October issue of PERE magazine, GI founder Rick Magnuson said Macerich's ventures with private real estate investors was a more “creative” way for the REIT to recapitalise rather than diluting shareholders with public equity offerings.

As a result, GI is targeting distressed REITs with the hopes of closing on five or six similar-such REIT recapitalisations.

In the statement, Heitman chief executive officer Maury Tognarelli said the two shopping centres were two “established and irreplaceable fortress malls situated in affluent markets”. Macerich will continue to manage the retail properties.

The Freehold Raceway Mall is a 1.7 million-square-foot regional shopping centre, which was bought by Macerich in 2005 as part of a $2.3 billion portfolio of retail properties from Wilmorite, according to RCA.
Chandler Fashion Center, which has 1.3 million-square-foot of space, was acquired by Macerich in 2002 as part of its $1.48 billion purchase of 28 properties from Westcor Realty.