Midwest Purchase
Aug 1, 2007 12:00 PM, Elaine Misonzhnik
In yet another joint venture portfolio deal this season, Jacksonville, Fla.-based shopping center REIT Regency Centers Corp. and Sydney, Australia-based Macquarie CountryWide Trust purchased a majority interest in 33 grocery-anchored shopping centers from the Clayton, Mo.-based real estate developer and manager the Desco Group for approximately $400 million. Macquarie will take the majority stake in the portfolio, at 60 percent, Regency will take a 13 percent stake and the Desco Group, which will continue to serve as the leasing and managing agent for the properties, will hold on to a 27 percent share.
Located throughout Missouri, Illinois, Indiana and Tennessee, most of the centers are anchored by Schnucks supermarkets. Some of the properties have been developed by Desco as far back as the late 1970s, according to company president Mark Schnuck, while others have just been completed last year. The Desco Group plans to re-invest the proceeds from the sale into its current development pipeline, which contains 3.3 million square feet of space in supermarket-anchored and power shopping centers, office buildings and mixed-use projects.
Regency and Macquarie, meanwhile, were attracted by the strength of the anchor tenant and the portfolio's 97 percent occupancy rate. Schnucks, the 10th largest privately held grocery chain in the United States, owns approximately 37 percent share of the grocery market in the St. Louis area.
