The Macerich Company (MAC), a real estate investment trust recently purchased the remaining 50.0% ownership of the Desert Sky mall in Phoenix from J.C.Penney Company, Inc. (JCP).
Macerich bought the remaining half of the Desert Sky mall for $ 27.6 million assuming a portion of the loan on the property. Concurrent with the acquisition, the $51.5 million loan was paid off.
Desert Sky is a shopping center spanning 900,000 square feet featuring a unique merchandise mix, mainly focusing on the Latino community. With the recently announced increased stake in Kierland Commons and this transaction, Macerich is strengthening its position in Arizona considering long-term growth opportunities.
In December 2010, Macerich launched a new concept in the former Mervyns department store at Desert sky converting it into a new Latin market place, which consists of rooms and spaces for more than 200 tenants to expand its efforts and connect with Latin American businesses and consumers. The demand is increasing for such a concept which could groom retailers to rent more space.
With the acquisition of the mall, Macerich continues to innovate itself with a customized merchandising strategy thereby making itself more attractive to the Latin American consumers.
Macerich is one of the largest operators of regional and community shopping centers in the U.S. with assets in high barrier-to-entry markets that have fared relatively well despite a challenging market. Macerich currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Simon Property Group Inc. (SPG) also retains a Zacks #3 Rank, which translates into a short-term Hold rating.
PENNEY (JC) INC (JCP): Free Stock Analysis Report
MACERICH CO (MAC): Free Stock Analysis Report
SIMON PROPERTY (SPG): Free Stock Analysis Report
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