Lend Lease Group is selling its 50 percent stake in the King of Prussia shopping mall to Morgan Stanley Real Estate Investing’s Prime Property Fund for $435 per square foot – a deal which values the Pennsylvania mall at $1.14 billion. The Australian-based property management and investment firm will receive net proceeds of $545 million from the sale after taking into account asset-level debt.
According to a statement, Lend Lease expects to make a profit of $100 million on its original investment, the proceeds from which will be used to repay the firm’s British Stirling-denominated debt and to fund its investment pipeline in the US. The sale is expected to close in August.
“The price achieved for the sale of the King of Prussia shopping mall is an excellent result for the group,” said Steve McCann, chief executive and managing director of Lend Lease, in a statement, adding that the firm's investment in the mall has delivered strong returns. Lend Lease acquired its stake in the property in 1996.
The other stakeholder in the King of Prussia mall is Kravco Simon. The King of Prussia, Pennsylvania-based real estate management and development company, operates as a subsidiary of the Simon Property Group, which acquired an interest in the firm, formerly known as The Kravco Company, in 2003.
Located northwest of Philadelphia, the King of Prussia mall is the largest enclosed retail shopping mall on the East Coast. The 2.6 million-square-foot property was built in 1982 and renovated in 2003, according to data from Real Capital Analytics. Major tenants include Neiman Marcus, Bloomingdale's, Nordstrom, Abercrombie & Fitch and the Apple Store.