Centro Properties Group, one of the world's largest shopping center owners and operators, is partnering with a subsidiary of Chicago, Illinois-based Inland American Real Estate Trust Inc. on a $471 million offer. real estate agent
Centro is headquartered in Glen Waverley, a Melbourne suburb in Victoria, Australia. The business is listed on the Australian Securities Exchange (ASX) (ASX).
Centro NP Residual Holding LLC, which is jointly owned by Centro Properties Group (ASX: CNP) and Centro Retail Trust, sold a portion of its stake in 25 shopping centers covering about 4.5 million square feet to Inland American CP Investment LLC, according to prepared statements from both organizations.
Inland American also had first rights on a portion of the 25 properties' first mortgage loan.
In 13 states, the properties include grocery-anchored and neighborhood shopping centers. As of September 30, 2010, the average occupancy rate was 91 percent.
According to the two companies involved in the transaction, the new joint venture has raised $310 million in 10-year term loans from J.P. Morgan and Goldman Sachs. The loans are backed by the joint venture's properties.
The proceeds from the sale of the shopping center interests and new term loans will be used to pay off all of Centro NP's debt, which is due to mature on December 9, 2010.
In addition to a preferred capital position and a preferred return, the new joint venture arrangement gives Inland American a major equity interest and some governance rights in the recapitalized portfolio.
"When we bought the original loan participation, we assumed these were quality assets, and this new joint venture agreement reaffirms that belief," said Michael Podboy, vice president of Inland American Business Manager & Advisor Inc.
"We're excited about our relationship with Centro and the settlement of our existing participation on a portion of the prior first mortgage loan because it was a good business deal for us."
There are high-traffic shopping centers with high occupancy rates, indicating a healthy mix of national and regional retail tenants such as Wal-Mart, Publix, Kroger, Best Buy, Kohl's, Staples, Bed Bath & Beyond, and T.J. Maxx."
Centro is the fifth-largest retail property owner/manager in the United States, the second-largest in Australia, and the largest retailer of Wesfarmers and Woolworths in Australia.
Centro has 682 properties in the United States and 128 properties in Australia and New Zealand, according to its website.
China's Property Giant Is Eyeing the United States and Australia.
Greenland Group, based in Shanghai and one of China's largest developers, is increasing its overseas investments by focusing on the United States and Australia.
According to the Wall Street Journal, the company is looking to invest in a project on the West Coast of the United States and is also considering a residential project in Melbourne.
Brookfield Asset Management has already announced the acquisition of a residential and hotel project in Sydney for $497 million.
Chairman Zhang Yuliang told reporters, "We are interested in areas where there are a lot of Chinese people."
According to him, the purchase in Sydney is supported by loans from Chinese and Australian banks.
The business hopes to profit from the growing number of Chinese immigrants and students studying abroad.
Mr. Zhang also said that government steps to cool the market are important because housing prices are "excessive," according to the Journal.
Mr. Zhang told reporters that "homes will have to be taxed and they will have to live with it." "Property developers will have to adapt and adjust their offerings to appeal more to first-time home buyers," says the study.