WPG, O’Connor Close Second Retail JV

By Keith Loria, Contributing Editor

O’Connor Capital Partners has entered into a joint venture with Washington Prime Group Inc. by acquiring 49 percent of a 2 million-square-foot portfolio of seven open-air retail centers, worth a reported $600 million.

Vineland Pointe in Orlando, Fla.

According to the terms of the deal, Washington Prime will retain a 51 percent interest in the portfolio and will continue to lease and manage the properties, as it has since originally acquiring them.

“We are extremely pleased to be partnering with Washington Prime on this highly desirable retail portfolio,” William O’Connor, O’Connor Capital Partners’ CEO, said in a prepared release. “All seven of the properties are specialty open-air centers located in key upscale markets. With restaurants, movies and other amenities, they provide an extremely attractive shopping and leisure experience.”

The portfolio consists of Arbor Hills in Ann Arbor, Mich.; Classen Curve/Nichols Hills Plaza/The Triangle at Classen Curve in Oklahoma City, Okla.; Gateway Center in Austin, Texas; Palms Crossing in McAllen, Texas; The Arboretum in Austin; The Shops at Arbor Walk in Austin; Malibu Lumber Yard in Malibu, Calif.

The latter property is expected to be transferred to the joint venture in the second quarter of 2017.

A recent CBRE Emerging Trends study about the Austin market, where several of these properties are based, showed that 60 percent of respondents view Austin as a place to buy retail right now, and another 36 percent would hold onto existing assets.

In addition, the report identifies Austin as an attractive area for Millennial workers, which translates into shoppers.

Major tenants in the centers include Whole Foods, Crate & Barrel, DSW, Ulta, Lululemon, Nordstrom Rack, Cheesecake Factory, Anthropologie and Trader Joe’s.

The transaction marks the second joint venture between the two companies. In 2015, the two completed their first partnership acquiring five malls totaling 4.5 million square feet, and related out-parcels. At the time of the sale, these properties were valued at nearly $1.6 billion.

The five malls included were The Mall at Johnson City in Johnson City, Tenn.; Pearlridge Center in Aiea, Hawaii; Polaris Fashion Place in Columbus, Ohio; Scottsdale Quarter in Scottsdale, Ariz.; and Town Center Plaza, which includes Town Center Plaza and the adjacent Town Center Crossing, in Leawood, Kan.

Neal, Gerber & Eisenberg LLP served as legal advisor to O’Connor in the transaction.

Image courtesy of Washington Prime Group