Starwood Capital Group has agreed to purchase a portfolio of seven US shopping centers from Taubman Centers for a total of $1.4 billion. The purchase price is comprised of $785 million of cash and $620 million of property-level debt that will be repaid or assumed by the Greenwich, Connecticut-based firm. Closing is expected to occur in the fourth quarter.
Starwood purchased the portfolio on behalf of its retail operating platform, Starwood Retail Partners. The assets expand that platform's portfolio to 28 properties totaling 26.8 million square feet across 15 states.
“The Taubman portfolio broadens our relationships with higher-end department stores and in-line tenants and gives us an excellent opportunity to continue to produce attractive returns for our investors,” said Starwood chairman and chief executive officer Barry Sternlicht in a statement.
The portfolio totals approximately 7.2 million square feet. The malls in the portfolio include MacArthur Center in Norfolk, Virginia; Stony Point Fashion Park in Richmond, Virginia; Northlake Mall in Charlotte; The Mall at Wellington Green in Wellington, Florida; The Shops at Willow Bend in Plano, Texas; The Mall at Partridge Creek in Clinton Township, Michigan; and Fairlane Town Center in Dearborn, Michigan.
In an investor call on Wednesday, Robert Taubman, chairman, president and chief executive officer of Taubman, said the REIT was seeing “very strong investor interest in regional malls today” and the deal was a “win-win” for both Starwood and Taubman. “The seven centers we are selling are strong properties that fit well within the Starwood portfolio and will continue to thrive under their management,” he said in a statement.
The transaction represents the latest in a string of big portfolio deals by Starwood within the last year. In September, the firm acquired seven shopping centers from developer The Westfield Group for $1.64 billion. In January, Starwood bought 1.1 million square feet of office space from Kilroy Realty for $294.5 million and, in March, the firm purchased 23 owned and leased UK hotels for an undisclosed price in its acquisition of De Vere Venues.