Glimcher Realty Trust, (NYSE: GRT), will sell five mall properties to invest up to $100 million in new development and redevelopment projects, reports a press release. What malls will Glimcher sell?
* Almeda Mall - Houston, TX
* Eastland Mall - Charlotte, NC
* Montgomery Mall - Montgomery, AL
* Northwest Mall - Houston, TX
* University Mall - Tampa, FL
Glimcher has selected Eastdil Secured Broker Services Inc. to market and sell the properties. Sales will include total consideration of the malls. Glimcher expects to net $250 to $270 million from the sales.
Considering the malls net Glimcher nice profits as positive-cashflow investments, some may wonder why Glimcher has selected these assets for liquidation.
"Aggressively selling non-core assets is a central part of our strategy to upgrade the overall quality of our real estate," said Michael P. Glimcher, president and CEO. "We would expect to redeploy the sales proceeds into our redevelopment program, acquisition of new higher income growth assets and selective ground-up development of premium retail properties."
Primarily as a result of the company's mall disposition plans, Glimcher expects to recognize non-cash impairment charges of approximately $49 million during the second quarter of 2006. If the asset sales are not completed at estimated pricing levels, future adjustments to the impairment charges could be required.
"Even with the initial recognition of the non-cash impairment charges, we are anticipating an overall net gain of $10 to $30 million on the sale of the five properties," stated Mark E. Yale, executive vice president and CFO.
The guidance assumes the sale of the five malls as of the beginning of the fourth quarter of 2006.
Glimcher expects to reinvest nearly $100 million from the mall sales in acquisitions through its partnership with OMERS Realty Corp. and expects to invest nearly $90 million in new development and redevelopment projects.
One of these development projects includes a 650,000 square foot retail and office space complex. The complex, being built as a joint venture with The Wolff Co. and Vanguard City Home in Scottsdale, Ariz., will create an "outdoor urban environment" featuring "sophisticated architectural design." It will also feature dining, shopping and entertainment, and park space.
Glimcher will own half of the project, which is slated for completion in 2009.
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