Lightstone Acquires Interests in 20 Outlet Centers in $456M Deal

By Barbra Murray, Contributing Editor

Lightstone Value Plus REIT will soon have a stake in 20 factory outlet centers, now that it has signed on purchase from 22.54 to 25 percent interests in the properties from affiliates of Arbor Mortgage REIT.

The transaction, which involves assets with an aggregate 7.3 million square feet of space, is valued at $456 million. Lightstone REIT will fork over $91.2 million in cash and shares of its operating partnership for interests in the outlet centers and closing costs, and the company will assume a pro rata share of existing mortgage debt totaling approximately $364.8 million, as well. Additionally, terms of the deal give Lightsome REIT rights to four new development projects that will deliver in 2010 and 2012.

Spanning 15 states, the properties have an average occupancy rate of 93.4 percent and operate under the management of Prime Outlets.

The Arbor transaction constitutes a major move for Lightstone, which was formed in 2004. The industry's first no front-end load REIT, Lightstone REIT made its inaugural purchase in 2006, paying $26 million for the 256,000-square-foot Belz Outlets in St. Augustine, Fla. Other transactions include the November 2007 acquisition of a five-property apartment portfolio totaling 1,576 units in Florida and North Carolina from Camden Property Trust.

Based in Lakewood, N.J., Lightstone REIT invests in a variety of commercial real estate with a primary focus on capital appreciation, with income being a second priority. The REIT is presently offering common stock at $10 per share.

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Comments

[Sea Isle City Guy]

One can only hope that this acquisition will ultimately help out the economy at this time.