Justine Griffin / Herald Tribune – Taubman Centers, one of the developers of the new high-end mall in Sarasota County, is selling seven other shopping centers to Starwood Capital Group for $1.4 billion.
The Michigan-based company helping to create the Mall at University Town Center — the only enclosed mall scheduled to open this year in the U.S. — is shedding seven of its underperforming centers in an effort to reinvest in its more profitable ones and in future projects, retail analysts say.
“I think this is a great move by Taubman,” said Phoenix-based analyst Jeff Green. “They sold off their challenged centers, and now will reallocate these funds into new centers and the upgrading of some older, well-performing centers.”
The sale includes two centers in Virginia, two in Michigan, one in Charlotte, North Carolina, one in Plano, Texas, and The Mall at Wellington Green in Palm Beach County.
In a recent conference call with analysts, Robert Taubman, the company’s chief executive, called the deal “a win-win for both parties.”
Starwood, a private investment firm based in Greenwich, Connecticut, will pay $785 million and take on $620 million in debt.
The 1.3 million-square-foot Mall at Wellington Green includes more than 170 retailers but is one of the worst performing centers in South Florida.
“Taubman is one of the few developers doing ground-up development, so recycling capital is important,” said Faith Hope Consolo of New York’s Douglas Elliman Real Estate. “In fact, Taubman developed each of the centers it’s selling. It’s not unusual to sell a project after a decade or so to maximize your investment.”
Last year, Westfield Group sold a half-interest in six of its Florida malls — including its Sarasota Square and Southgate properties — to New York-based O’Connor Capital Partners. The 49.9 percent stake was valued at $1.3 billion.
Westfield gained $700 million in net proceeds from the transaction, which analysts said signaled that the mall developer was preparing to redevelop its properties with fresh capital.
Analysts said Taubman’s sales could help boost its other properties in Florida, which include Tampa’s International Plaza, Orlando’s Mall at Millenia and a stake in the Waterside Shops in Naples.
“This sale just gives them the flexibility to invest even more capital to improve projects and develop throughout their international portfolio, possibly including Florida,” Consolo said.
Taubman noted several new properties it is opening around the world, including the $315 million, 880,000-square-foot Mall at University Town Center in October.
Others include an enclosed mall in San Juan, Puerto Rico, in 2015, two malls in China in 2015 and 2016, one in Honolulu in 2016 and one in South Korea in 2017.