Simon Property Group Inc. (SPG), the largest publicly traded retail real estate company in North America, has recently signed a deal to acquire the outlet shopping center business of Prime Outlets Acquisition Co., one of the largest developers of outlet centers in the U.S.
The deal valued at $2.35 billion includes the assumption of Prime Outlet’s existing debt and preferred stock. Under the terms of the agreement, Simon will pay about $700 million for the owners’ interests in the shopping centers, out of which 80% will be paid in cash and 20% in common operating partnership units. The price of the partnership units will be based on a 10-day trading average of Simon common stock shortly before closing.
New Jersey-based Prime Outlets is a leading owner, operator and developer of outlet shopping centers in the U.S., with a portfolio of 22 outlet centers in prime locations such as Washington D.C., Baltimore, Orlando, and Williamsburg. As of Jun. 30, 2009, the overall portfolio of the company was 92% occupied, generating aggregate annual sales of approximately $370 per square foot.
With the acquisition, Simon has strengthened its leading position in the market and currently has 63 outlet centers spanning approximately 25 million square feet. Simon operates from five retail real estate platforms: Regional Malls, Premium Outlet Centers, The Mills, International Properties and Community/Lifestyle Centers. By the end of the third quarter of 2009, the company owned or had interests in 387 properties spanning 262 million square feet of gross leaseable space in North America, Europe and Asia.
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