Lightstone Buys $456M Retail Outlet Interest
By Erika Morphy of GlobeSt.com
Wednesday, July 09, 2008 - BALTIMORE - Lakewood, NJ-based Lightstone Value Plus REIT is taking a minority interest position in 20 factory outlets as well as receiving rights to four development projects in a $456-million deal. The REIT acquired the package from Arbor Mortgage, an affiliate of Arbor Mortgage REIT--a structure that puts Lightstone REIT on the same co-investor footing with Lightstone Group in the deal.
To finance the transaction, Lightstone Value Plus REIT is advancing $91.2 million in cash and shares of its operating partnership, with an additional pro rata share of existing mortgage debt that has an interest rate of 5.5%. The interest in the properties, which are located in 15 states, varies from 22.5% to 25%. Retailer Prime Outlets manages the centers, which total nearly 7.3-million sf and have an occupancy rate of 93.4%.
The acquisition is expected to deliver a steady cash flow to Lightstone, Stephen Hamrick, president of Lightstone Value Plus REIT, says in a prepared statement. "We're fortunate to have the opportunity to invest in a niche industry leader with a portfolio of nationally recognized factory outlet shopping centers," he says, adding that "Prime's successful execution on the opportunities within its development pipeline should create attractive future investment opportunities for the REIT."
