Mills ends another JV, buys Opry Mills outright
Jul 2, 2002 12:00 PM, — staff & wire reports
Nashville’s Opry Mills is now wholly owned by Arlington, Va.-based The Mills Corp. The self-managed REIT purchased the remaining 33% of Opry Mills that it did not own for $87 million from joint venture partner Opryland Attractions Inc., a subsidiary of Gaylord Entertainment.
The purchase price consisted of $25.8 million in cash, $56 million in assumed debt, and the contribution of Mills’ interest in 24 acres adjacent to the 1.1 million-sq.-ft. center. The cash portion of the deal was funded by Mills’ recent equity offering of 7.5 million shares, which closed in early May.
"We view the acquisition favorably as it simplifies the Mills story by eliminating a joint venture," wrote Salomon Smith Barney analyst Jonathon Litt in a report on the transaction released yesterday. "We continue to believe that Mills is evaluating their acquisition opportunities, including non-owned Mills-type assets and traditional regional malls that could be redeveloped."
At 9.1%, the transaction’s cap rate is comparable to that of Mills’ recent buyout of its joint venture interests held by Simon Property Group.
Opry Mills, which opened in 2000, was built for a price of $200 million and includes tenants such as Bass Pro Shops Outdoor World, NASCAR Silicon Motor Speedway, Tower Records, Jillian’s and a Regal Cinemas IMAX theater.
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