Simon Property and General Growth Properties are the final bidders for Providence Place, a 1.4 million-square-foot trophy mall in downtown Providence, R.I

Real Estate Alert, Jan 28, 2004

Simon Property and General Growth Properties are the final bidders for Providence Place, a 1.4 million-square-foot trophy mall in downtown Providence, R.I. The mall could fetch $500 million--a much higher price than owner Commonwealth Development expected when it put the property up for sale in early December.

At that price, the buyer's initial annual yield would be just 6%. Broker Holliday Fenoglio Fowler targeted less than a dozen large mall buyers during marketing, in part because of the aggressive pricing. Another factor: Commonwealth, which is controlled by Daniel Lugosch, wants to avoid tax liability by receiving REIT shares as part of the trade.