The Chicago-based owner of two West Michigan malls has reached a definitive agreement to sell in a deal that would reportedly create one of the largest retail property companies in the country.
GGP Inc. (NYSE: GGP), the national retail real estate firm that owns Rivertown Crossings in Grandville and The Crossroads in Portage, announced on Monday that it plans to sell to Brookfield Property Partners LP (Nasdaq: BPY), a company domiciled in Bermuda, in a transaction valued at nearly $15 billion, according to a Bloomberg News report.
Under the terms of the deal, GGP shareholders would have the option to receive either $23.50 for each common share of the company’s stock they own, or one share of a new real estate investment trust Brookfield plans to create.
“This is a compelling transaction that enables GGP shareholders to receive premium value for their shares and gives them the ability to participate in the long-term upside of their investment,” Brookfield CEO Brian Kingston said in a statement. “We are pleased to have reached an agreement and are excited about combining Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors with GGP’s portfolio of irreplaceable retail assets.”
Malls stocks dipped on news of the planned deal as analysts projected GGP would fetch a higher valuation, according to a CNBC report.
Representatives for GGP and Brookfield did not respond to questions about what, if anything, the transaction might mean for the Grandville and Portage malls.
Nonetheless, commercial real estate executives have questioned the future of the roughly 20-year old Rivertown Crossings, as MiBiz previously reported.
Woodland Mall — Rivertown Crossings’ rival mall in Grand Rapids — is in the midst of a $100 million redevelopment aimed at getting more high-end shops and restaurants to the property.
Meanwhile, the owners of Rivertown Crossing have not invested in meaningful renovations, leading some commercial real estate sources to call for major changes there before any stores begin to close.
“Something is going to need to change there,” according to Jeff Hainer, who spoke to MiBiz last year for a story on the future of the mall.
Hainer, a senior research analyst in the Grand Rapids office of Colliers International Inc., a commercial real estate brokerage firm, does not represent Rivertown Mall.
“There’s some big trees that are going to fall there and that will definitely affect (the Grandville) area,” he said at the time.