The Macerich Company (MAC), a real estate investment trust and its joint venture partner Institutional Mall Investors, LLC (IMI) has acquired full ownership of Arizona based Kierland Commons from Woodbine Development Corporation based in Dallas and the Herberger Interests of Phoenix.
In January 2005, Macerich and IMI had each bought a 24.5% interest in Kierland Commons. Following the current transaction, Macerich and IMI will own 50.0% each of the Arizona property. Macerich will pay $34.2 million in cash and assume $18.6 million in debt for its new ownership. Macerich will continue to manage and lease the lifestyle center.
Kierland Commons is a lifestyle center, in Scottsdale, Arizona, which includes 316,000 square feet of retail space on 38 acres with retail occupancy of 98.0% currently. With this transaction, Macerich will be able to expand its presence in exceptional real estate markets as Macerich is already recognized as having one of the most high quality portfolios in the industry.
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.
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