Richmond, Va., and Salisbury, Md. — Rouse Properties Inc. (NYSE: RSE), a REIT based in New York City that specializes in enclosed regional malls, has acquired Chesterfield Towne Center in Richmond, Va., and The Centre at Salisbury in Salisbury, Md. for an aggregate purchase price of $292.5 million. The two properties total nearly 2 million square feet of retail space. The Macerich Company (NYSE: MAC), based in Santa Monica, Calif., sold the malls.
"Chesterfield Towne Center and The Centre at Salisbury are key additions to our portfolio of dominant, middle-market regional malls," says Andrew Silberfein, president and CEO of Rouse. "These malls both serve expansive trade areas with limited enclosed mall competition, supporting strong inline and anchor sales volumes."
The 1 million-square-foot Chesterfield Towne Center is located in the Chesterfield County retail corridor, a submarket with average household income of $101,000 in a five-mile radius. Opened in 1975 and most recently renovated in 2008, the mall serves a trade area of more than 550,000 people.
The property was 88.1 percent leased at the time of the sale and anchored by Macy's, Sears, JC Penney and Garden Ridge. The tenant lineup also features other prominent retailers such as Victoria's Secret, LOFT, ULTA Beauty and Bath & Body Works.
Average inline sales at Chesterfield are approximately $360 per square foot. As part of the purchase, Rouse assumed an existing $109.7 million non-recourse loan with a 4.75 percent interest rate and an October 2022 maturity date.
Meanwhile, the 862,000-square-foot The Centre at Salisbury is the only enclosed mall in approximately 55 miles and serves a trade area of more than 330,000 people in Maryland, Virginia and Delaware. The property opened in 1990 and was renovated in 2010.
Macy's, Boscov's, Sears, JC Penney and Dick's Sporting Goods anchor The Centre, which also includes a 72,000-square-foot outparcel leased to Regal Cinema. Restaurant offerings include Longhorn Steakhouse, Olive Garden, Red Lobster, Ruby Tuesday and Famous Dave's BBQ.
The mall was 93.8 percent occupied at the time of the sale with average inline sales of approximately $320 per square foot. Rouse assumed an existing $115 million partial-recourse loan with a 5.79 percent interest rate and a May 2016 maturity date.
"The acquisition diversifies Rouse's geographic presence, with Maryland and Virginia representing our 20th and 21st states," says Silberfein. "We see opportunities at both malls to apply our strong platform to substantially improve the malls' economic metrics, merchandising mix and tenant quality."
Rouse now owns 34 properties totaling about 21.5 million square feet.