Greensboro, NC-based Tanger Factory Outlet Centers, Inc. has entered into agreements to acquire two retail centers from affiliates of Baltimore-based Cordish. The projects, located in Atlantic City, NJ and Ocean City, MD, total 694,000 square feet.On May 6, 2011, Tanger's Operating Partnership entered into agreements with OCF Holdings LLC, Cordish AC-1 Associates LLC, Cordish AC-2 Associates LLC and Atlantic City Associates Number Three Manager LLC to acquire "substantially all" of the economic interests in the two outlet centers for a combined purchase price of $125.0 million in cash and the assumption of $75 million in debt.
The debt being assumed consists of three mortgages with various lenders that bear interest at fixed rates ranging from 5.14% to 7.65% per annum and have maturity dates ranging from 2016 to 2026.
Tanger paid a cash deposit of approximately $11.8 million on May 9, 2011 to secure its obligations under the Agreements, which will be credited against the purchase price for these interests at closing. The closing for both properties, which is subject to approval by the current mortgage holders, is expected to take place during the third quarter of 2011.
In a statement released by Cordish Companies, Gary Block, Vice President at The Cordish Company and Project Director of The Walk in Atlantic City, said the asset sale is "a joint venture with Tanger Factory Outlets on the existing phases of The Walk in Atlantic City, as well as for Ocean City Factory Outlets in Ocean City, Maryland."
Block added that Tanger will acquire a controlling interest in the Cordish entity which owns phases of The Walk, but that "Cordish will retain 100 percent ownership of future development phases in Atlantic City, of which we expect there to be many."
According to The Press of Atlantic City, construction on a parking garage and 45,000-square-foot, dozen-store expansion of The Walk is underway, the third of four planned phases of that asset. The $45 million project was supposed to be finished this year, according to the publication, but officials with the Casino Reinvestment Development Authority, Cordish's local partner on the project, now anticipate an early 2012 opening.
The Walk opened in 2003. It grew from 18 stores when it opened to nearly 100 stores by 2006. Vendors have yet to be announced for the additional 12 stores that are part of the asset's expansion.
The Ocean City Factory Outlets in Ocean City, MD is a 203,000 square foot destination center along Route 50, one-half mile from the Boardwalk. More information on that asset is available as a SCRIBD document below.
SOURCE: CityBiz Real Estate
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