Giant shopping-center portfolio hits market

Real Estate Alert, May 5, 2004

A firm controlled by investor Malcolm Glazer is marketing a shopping-center portfolio valued at up to $700 million.

The 2.5 million-square-foot package consists of 39 shopping centers in affluent areas in eight states, with a large concentration in Texas. The average occupancy rate is 95%.

The properties are being shopped as a portfolio via Eastdil Realty. The offering is an unusual chance for a retail buyer to snatch up a large portfolio in one fell swoop. During the bull market of the past two years, so many properties have been locked up by long-term investors that few large portfolios are left to come on the market.

The shopping centers represent three-quarters of the holdings of Glazer's firm, First Allied of Rochester, N.Y. The firm has been building up its portfolio for more than a decade, but is now seeking to capitalize on the strong demand for retail properties. First Allied plans to continue acquiring shopping centers, rebuilding its portfolio over time.

The company is controlled by Malcolm Glazer and his family. His son, Ed Glazer, is in charge of the firm's real estate holdings. The Glazers also own the Tampa Bay Buccaneers football team, controlling interests in Harley Davidson and Formica, and various TV stations.

More than a dozen of the offered properties are located in San Antonio, Dallas and Houston. The rest are spread out among Georgia, Virginia, Maryland, Ohio, Minnesota, Colorado and Nevada. Most were built in the 1990s.

Household income within a one-mile radius of the properties averages a whopping $90,000. Most of the shopping centers either do not have anchors or are anchored by retailers that own their own space. The tenants at the properties include Kroger, Kmart, Eckerd, Men's Wearhouse, Talbot's and Regal Cinemas.