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USAA Real Estate JV buys mall stakes for $1.1bn

The real estate arm of USAA purchased interests in five regional US malls with two other firms.

USAA Real Estate Company, the real estate arm of financial services firm USAA, has purchased a five-mall portfolio with two other partners for $1.1 billion from an Australian mall operator, the firms announced Monday.

USAA Real Estate Company joined with Centennial Real Estate Company and Montgomery Street Partners, the real estate investment branch of Blum Capital Partners, to purchase the regional malls. Dallas-based Centennial plans to operate the shopping centers.

“We are very pleased to be completing our first venture with Centennial Real Estate and Montgomery Street Partners,” said Len O’Donnell, the president and CEO of USAA Real Estate Company, in a statement Monday.

Westfield, the seller, will retain a minority stake in the properties. The Sydney, Australia-based shopping center company said it was shedding the assets to focus on its flagship stores, such as the mall opening inside New York’s World Trade Center in the spring.

The malls, located across the US, total more than 6 million square feet and have an average occupancy rate of 97 percent, according to a statement. The malls were built between 1960 and 1987, according to data site Real Capital Analytics.

USAA Real Estate manages about $12 billion in assets, according to Monday’s statement.