Taubman Centers Inc. and The Macerich Company on Monday agreed to purchase Country Club Plaza, a mixed-use retail and office property in Kansas City, Mo., for $660 million in cash, excluding transaction costs. Taubman and Macerich will each have a 50 percent interest in the center, which will be jointly managed by both companies.
The center previously was owned by Highwoods Properties. Concurrent with or shortly after closing, a long-term, fixed-rate loan for 50 percent to 60 percent of the purchase price is expected to be placed on the asset.
Originally built in 1922, Country Club Plaza is a 15-block, 1.3 million-square-foot property in the heart of Kansas City. The retail portion includes 804,000 square feet of gross leasable space with key tenants such as Apple, H&M, Tesla and Lululemon and restaurants such as The Capital Grille and The Cheesecake Factory. The retail component is 95 percent leased. The 10-story Valencia tower has 468,000 square feet of office space and there is additional office space above the ground-level retail. The Plaza portfolio generated cash and GAAP net operating income of $31 million in 2015.
Robert S. Taubman, chairman, president, and chief executive officer of Taubman Centers, said, “This purchase is consistent with our strategy to own high quality, dominant assets in great markets.”
“This investment represents the latest example of Macerich’s continuing strategy of recycling capital out of slower-growth assets, including Panorama Mall, which we recently sold for $100 million, into truly irreplaceable, market-dominant centers with stronger growth prospects,” said Arthur Coppola, chairman and ceo of Macerich. “Together with Taubman, we see opportunities to expand the market reach of Country Club Plaza as well as the potential for further retail densification of this timeless asset.”
The transaction has been approved by the boards of directors of Taubman and Macerich. The deal is subject to usual and customary closing conditions and is expected to close in the first quarter.