Bloomberg News

TIAA-CREF Joins APG in Venture to Buy Stakes in Five U.S. Malls

October 17, 2011

Oct. 17 (Bloomberg) -- A joint venture of TIAA-CREF and APG Algemene Pensioen Group NV bought stakes in five U.S. regional malls to provide steady income sources for the pension funds.

The partnership acquired interests in four malls in Kansas, Missouri, Tennessee and Texas owned by CBL & Associates Properties Inc., TIAA-CREF said today in a statement. Those properties were included in a deal between the New York-based retirement fund and CBL that was completed this month and reduced the Chattanooga, Tennessee-based mall owner’s debt by about $486 million. The venture also bought an interest in a fifth property, in Bethesda, Maryland, from Australia’s Westfield Group.

“We see dominant regional malls as being an important part of a well-diversified real estate portfolio, with the ability to provide durable income streams and long term value,” Scott Kempton, managing director of TIAA-CREF’s global real estate portfolio, said in the statement.

TIAA-CREF owns 51 percent of the venture, with the rest owned by APG. The five properties are valued at $1.5 billion, according to the statement.

Retail centers have been hurt by slowing economic growth and a U.S. unemployment rate that’s lingered at or above 9 percent for six straight months. Regional and super-regional mall vacancies rose to 9.4 percent in the three months ended Sept. 30 from 8.8 percent a year earlier and 9.3 percent in the second quarter, according to Reis Inc., a New York-based property-research company. It was the highest since Reis began publishing the data in 2000.

Teachers Insurance and Annuity Association - College Retirement Equities Fund, or TIAA-CREF, oversees $469 billion, including retirement assets for teachers and researchers. It owns more than $17 billion in office, retail, industrial and apartment buildings in the U.S., Canada, and western Europe. APG is a Netherlands-based pension fund provider with assets of 280 billion euros ($385 billion) as of July.

--With assistance from Hui-yong Yu in Seattle. Editors: Daniel Taub, Larry Edelman

To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net


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