Simon Property Group Purchases 100% Stake in Puerto Rico's Plaza Carolina and Additional Interests in Bangor Mall and Montgomery Mall
INDIANAPOLIS, May 4 /PRNewswire-FirstCall/ -- Simon Property Group, Inc.
(NYSE: SPG) (the "Company" or "Simon") announced today that it has completed
the purchase of a 100% interest in Plaza Carolina in San Juan, Puerto Rico for
$309 million from a partnership owned 50% by the California Public Employees'
Retirement System ("CalPERS") and 50% by the State of Michigan Treasury
("Michigan"). Credit Suisse First Boston principled the private placement of
a five-year, $260 million loan in connection with the acquisition. The
financing is comprised of a fixed and floating component at an initial
approximate all-in blended rate of 3.1%.
Plaza Carolina is the premier shopping destination in the entire northeast
sector of Puerto Rico and receives over 30,000 visitors per day. Located in
Carolina, southeast of San Juan, Plaza Carolina comprises 1.1 million square
feet and is anchored by JCPenney, Sears, a supermarket, a 12-screen movie
theater and four junior anchors. Specialty shop retailers include Limited
Too, PacSun, d.e.m.o., Claire's Boutique, Casa Febus, GAP, Rave, Charlotte
Russe, Zales Jewelers, World Footlocker, Old Navy and Champs Sports. Built in
1978, Plaza Carolina generates total annual sales of approximately $275
million and sales per square foot of over $450. The center has maintained a
98% average historical occupancy rate over the last five years.
The Company also announced that on April 27, 2004, CalPERS and Michigan
also sold their entire interests in Bangor Mall in Bangor, Maine (50%
interest) and Montgomery Mall in Montgomeryville, Pennsylvania (57.31%
interest) to the existing partners in these assets. In connection with these
transactions, Simon Property Group's interest in Bangor Mall increased to
67.6% from 32.6% and its interest in Montgomeryville Mall increased to 54.4%
from 23.1%. The Company's cost to acquire these additional ownership
interests was approximately $67 million, partially funded by the proceeds of a
mortgage refinancing for Montgomery Mall. An existing 7.48%, $27 million
mortgage loan maturing on August 10, 2006 was replaced by a $96 million, 10-
year mortgage at a rate of 5.17%.
Bangor Mall comprises 655,000 square feet and is anchored by Filene's,
JCPenney and Sears, with Dick's Sporting Goods under construction and
scheduled to open in November of 2004. Bangor Mall generates sales of
approximately $370 per square foot, was 91% leased at December 31, 2003, and
is the only mall in the city of Bangor. Montgomery Mall is a 1.1 million
square foot center in suburban Philadelphia and is anchored by JCPenney,
Macy's, Sears and Strawbridge's. Montgomery Mall generates sales of
approximately $360 per square foot and was 92% leased at December 31, 2003.
"Plaza Carolina is one of the Caribbean's premier retail venues, making
this acquisition a perfect fit within Simon's strategy to own and manage
highly productive retail real estate," said David Simon, chief executive
officer of Simon Property Group. "Our increased ownership in Bangor and
Montgomery, two well-positioned, high-quality Kravco Simon assets, will
facilitate our ability to enhance cash flow from the assets. These
acquisitions, which we have been working on for some time and were
contemplated in our 2004 guidance given in February, are expected to deliver a
combined initial 12-month unlevered yield of 8%."
Simon Property Group, Inc. (NYSE: SPG), headquartered in Indianapolis,
Indiana, is a real estate investment trust engaged in the ownership,
development and management of income-producing properties, primarily regional
malls and community shopping centers. Through its subsidiary partnerships, it
currently owns or has an interest in 247 properties in North America
containing an aggregate of 192 million square feet of gross leasable area in
37 states plus Canada. The Company also holds interests in 48 assets in
Europe (in France, Italy, Poland and Portugal). Additional Simon Property
Group information is available at www.simon.com .
SOURCE Simon Property Group, Inc.
CONTACT: Shelly Doran, +1-317-685-7330 (Investors), or Les Morris,
+1-317-263-7711 (Media), both of Simon Property Group, Inc.
Web site: http://www.simon.com