Washington Prime Group Forms $600 Million Joint Venture

May 17, 2017

The joint venture with O’Connor Mall Partners will own seven of Washington Prime’s open-air properties.

Willkie represented Washington Prime Group, a publicly traded retail REIT, in connection with its formation of a joint venture with O’Connor Mall Partners, L.P., an affiliate of O’Connor Capital Partners. The joint venture owns six of Washington Prime’s open-air properties (with a seventh expected to be added), which are valued at approximately $600 million.

O’Connor has a 49% interest in the joint venture and Washington Prime retains a 51% interest. The six properties in the joint venture are: Arbor Hills, located in Ann Arbor, Michigan; Classen Curve/Nichols Hills Plaza/The Triangle at Classen Curve, located in Oklahoma City, Oklahoma; Gateway Center, located in Austin, Texas; Palms Crossing, located in McAllen, Texas; The Arboretum, located in Austin, Texas; and The Shops at Arbor Walk, located in Austin, Texas. A seventh property, Malibu Lumber Yard, located in Malibu, California, is expected to be transferred to the joint venture later this year. A Washington Prime affiliate will continue to lease and manage the properties.

The transaction generated net proceeds of approximately $335 million to Washington Prime after taking into account the assumption of existing debt on the properties and new debt placed on certain of the assets, and closing costs. The new financing, in the aggregate principal amount of $224,679,000, is secured by the lassen Curve, Triangle at Classen Curve, Gateway Center and Arboretum Properties.  The lender is Teachers Insurance and Annuity Association of Ameica. The net proceeds will be used to reduce the company’s outstanding debt, as well as for general corporate purposes.

The Willkie deal team was led by real estate partner David Drewes, with assistance from tax partner Henry Cohn, and associates Jennifer Coffey, Elizabeth Case, Steven Grant, Kapiljeet Dargan and Timothy Dembo.