Brookfield Property Partners, one of the world's largest mall owners, is further expanding its portfolio by picking up JPMorgan Chase’s stake in four mutually owned shopping centers in a private transaction that included a partial sale to the bank.
The transaction, which traded the stakes the New York State Teachers’ Retirement System had in two centers, values all five malls at 3.2 billion U.S. dollars, including debt, two people familiar with the deal told CoStar News.
Brookfield, based in Toronto, now has complete ownership of the Perimeter Mall in Atlanta; Park Meadows in Denver; Towson Town Center in Towson, Maryland; and the Shops at Merrick Park in Coral Gables, Florida. It sold its interest in Bridgewater Commons in Bridgewater, New Jersey. The teachers' retirement system had investments in the Colorado and Maryland centers.
The move comes only 18 months after Brookfield’s $14.8 billion takeover of GGP’s 125-property portfolio, at a time when shopping centers are losing major anchors and other large retail tenants. Brookfield said then the purchase, in part, fell under an overall strategy to transform many of the shopping centers and malls — mostly located in prime locations close to consumers — into minicities with residences, offices and other uses beyond stores and restaurants.
Brookfield and JPMorgan declined to comment. The transaction was first reported by Bloomberg, citing sources who asked not to be identified.
In what executives consider a means to “future proof” the properties, plans include adding residential units, flexible workspaces, hotels, restaurants and entertainment venues, according to Brian Kingston, Brookfield’s chief executive.
“The ongoing trend of nontraditional mall tenants taking space in our properties has not slowed,” he said 18 months ago. “We continue to reposition valuable space that was once occupied by department stores.
“We view this space as the most compelling opportunity to reinvest in our properties by replacing those stores with new and exciting uses that complement the in-line retail mall component," he said.
At a recent meet-and-greet with investors and analysts, Brookfield executives reiterated that thinking, according to analysts’ reports. Six months ago, for example, Brookfield announced a plan to invest $400 million to transform the land surrounding a Macy's in Manhasset, New York, by adding housing, office space, retail and a hotel.
That plan keeps Macy's as the property owner and operator of its 332,000-square-foot store at 1100 Northern Blvd. in Manhasset, while Brookfield redevelops the surrounding 16 acres with 355 rental apartments, 72,000 square feet of office space, 73,400 square feet of retail and a 200-room hotel, according to Brookfield.
jwaters@costar.com
@JenWatersNews
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