Australian firm gains 24.5 percent interest in Short Pump Town Center
Short Pump Town Center has a new co-owner. QIC, one of the largest institutional investment managers in Australia, acquired a 24.5 percent interest in the Henrico County shopping mall as the result of a $2 billion joint venture deal announced by Forest City Enterprises Inc., the mall’s operating firm, and one of its chief co-owners.
Forest City, based in Cleveland, said the completion and partial closing of previously announced joint ventures to recapitalize and invest in a portfolio of eight of Forest City's regional retail malls, moved a quarter interest of the mall to QIC.
In June, Forest City said that QIC would purchase 49 percent of its interest in eight malls, including Short Pump. Seven of the individual joint ventures closed on Sept. 10, and the eighth is expected to close by the end of September. The deal reduced Forest City’s interest in Short Pump from about 50 percent to 25.5 percent.
Forest City expects to generate liquidity of about $350 million, after transaction costs. It said sales at the eight malls currently average about $500 per square foot, on a rolling 12-month basis.
“This strategic capital partnership with QIC is our largest such initiative to date, and an exciting opportunity to work with an experienced global investor to enhance these already strong retail centers,” David J. LaRue, Forest City president and CEO, said in a statement.
Forest City plans to use a majority of the money from the transaction to reduce debt, but also expects to use a portion to fund expansion, renovation and other reinvestment initiatives at a number of the malls. Short Pump, a 1.3 million-square-foot property built a decade ago, plans a renovation in 2014.
Some of the other properties in the deal included malls in California, West Virginia and Nevada.
Pruitt Associates, a Richmond-based firm, remains a 50 percent owner of Short Pump.