A firm from Down Under is set to grab a larger share of the Richmond region’s busiest mall.
QIC, a Brisbane, Australia-based investment firm, is under contract to purchase Forest City Realty Trust’s 33 percent ownership stake in Short Pump Town Center.
Announced this week, the sale is part of Cleveland-based Forest City’s effort to sell 10 mall properties across the country to QIC.
The deal, which values Forest City’s stake in the 10 malls at $1.55 billion, would give QIC control of two-thirds of the Short Pump mall, which it bought a third of in 2013. Locally based Pruitt Cos. owns the remaining third.
Tommy Pruitt of Pruitt Cos. confirmed that his family’s company will retain their stake in the mall, and that the sale won’t affect day-to-day operations.
The portfolio of malls in the deal is valued at a total of $3.17 billion and includes properties in California, Nevada, Colorado, New York, Florida, Pennsylania. Four of the 10 malls are in California.
The sale of Forest City’s stake in six of the malls is expected to close by yearend.
The final group of four malls, including Short Pump Town Center, is expected to fetch $887 million in proceeds. The sale of those properties won’t close until Forest City “will be transferred to QIC under a fixed-price option and are expected to close as Forest City secures replacement assets,” a company release states.
Forest City spokesman Jeff Linton said the company may reinvest the proceeds from the latter four into other, similar properties to defer tax consequences.
“We structured the transaction in a tax-efficient way,” Linton said. “The four malls in that second group are the most valuable in the portfolio, which is why they’ll close in the future.”
The company did not provide a breakdown of the value of the individual malls. Linton said most of the other nine malls in the deal are structured as a partnership between Forest City and QIC, owning 51 and 49 percent of them, respectively.
Forest City CEO David LaRue said in the release that the company will focus on “urban residential, office and mixed-use assets.”
Aside from Short Pump Town Center, the company’s remaining Richmond holdings include the Tobacco Row apartments, a series of multi-family lofts on East Cary Street overlooking Dock Street, as well as Glen Forest Office Park, an 11-building park at 1802 Bayberry Court, off Interstate 64 and near Forest Avenue.
Short Pump Town Center, which opened in 2003, is nearly at max occupancy. The mall has over 140 tenants and 98 percent occupancy, with locally based men’s retailer Collared Greens the latest to snag a storefront.
While the Aussies are showing an increased appetite in Richmond retail, a California-based developer recently did the opposite.
Last week, Craig Realty scrapped its plans for the Outlets at Richmond, a long-proposed outlet mall in Ashland.