CBL Acquires Retail and Office Portfolio

CBL & Associates Properties Inc., a real estate investment trust that develops shopping centers, said Friday it will purchase a portfolio of retail and office buildings in North Carolina through a joint venture.

Through the 50/50 venture with Teachers' Retirement System of The State of Illinois, CBL will acquire a portfolio that includes Friendly Center in Greensboro, N.C., for $356.6 million.

The venture will assume about $81.6 million of non-recourse, long-term fixed debt.

Separately, CBL will acquire a portfolio of eight community centers in Greensboro and High Point, N.C., and 12 office buildings in Greensboro and Raleigh, N.C., and Newport News, Va.

The properties are being sold by the Starmount Co., a private real estate owner, operator and developer.

The transactions are valued at a total of $540.8 million, including the $356.6 million joint venture. CBL expects the total deal to create about 3 cents per share of funds from operations in the first 12 months.

The transaction will financed through a new $459.1 million term and bridge loan.

The 1 million-square-foot Friendly Center is anchored by Belk, Macy's, Sears, a 16-screen Grande Cinema, Barnes & Noble and Old Navy. A 20,000-square-foot expansion is scheduled for completion in the spring that will introduce Apple and other retailers to the market.

Friendly Center produced sales of $426 per square foot for the year that ended Oct. 31.

The joint venture acquisition deal will also include The Shops at Friendly Center, a 253,000-square-foot open-air associated center in Greensboro, and six Class-A office buildings adjacent to Friendly Center in Green Valley Office Park.

In addition, the venture will purchase the 355,000-square-foot Renaissance Center in Durham, N.C.

CBL expects to close on the majority of the transaction Friday. The Renaissance Center acquisition is expected to close by the end of the year.

Commonwealth Realty Advisors Inc. advised CBL and Teachers on the transaction.

CBL shares gained 65 cents, or 2.3 percent, to $29.01 in morning trading. During the past 52 weeks, the stock has fallen from a high of $50.36 in February to a low of $26.92 on Tuesday.