Taubman (TCO) Concludes Seven Malls Sale, Reaps $716M
Taubman Centers Inc. (TCO) completed its previously announced divestiture of seven malls to Starwood Capital Group, through a controlled affiliate, for a transaction value of $1.403 billion (prior to transaction expenses). This is a strategic fit as this retail real estate investment trust aims to capitalize on the rising interest of investors in premium region malls and focuses on capital recycling.
The net cash proceeds reaped from this transaction were $736 million, after the deduction of property-level debt and accrued interest of $623 million and transaction costs of $44 million. Of this, Taubman’s share was $716 million.
Notably, the seven malls that have been sold are – The Shops at Willow Bend (Plano, TX), Northlake Mall (Charlotte, NC), The Mall at Partridge Creek (Clinton Township, MI), The Mall at Wellington Green (Wellington, FL), Stony Point Fashion Park (Richmond, VA), Fairlane Town Center (Dearborn, MI) and MacArthur Center (Norfolk, VA).
Going forward, we believe that the asset dispositions will provide the dry powder to invest in Taubman's other growth initiatives. The company is well poised to ride on the growth trajectory with its solid development and redevelopment pipeline. However, Taubman's ongoing disposition spree weighs upon the near-term earnings.
Taubman is scheduled to announce third-quarter 2014 results on Oct 30. The company currently has an Earnings ESP of -1.11% for the quarter. This is because the Most Accurate estimate stands at 89 cents, while the Zacks Consensus Estimate is pegged at 90 cents. This, along with the company’s Zacks Rank #4 (Sell), makes surprise prediction difficult.
Investors interested in the retail REITs may consider stocks like General Growth Properties, Inc (GGP), The Macerich Company (MAC) and Regency Centers Corporation (REG). All three stocks carry a Zacks Rank #2 (Buy).
Read the Full Research Report on TCO
Read the Full Research Report on MAC
Read the Full Research Report on REG
Read the Full Research Report on GGP
Zacks Investment Research
