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Chelsea Property Group, Inc. (ticker: CPG, exchange: New York Stock Exchange) News Release - 26-Dec-2000
Chelsea GCA Realty Completes Purchase of Interests in Four Properties Transaction Expected to Be Immediately Accretive
ROSELAND, N.J., Dec. 22 /PRNewswire/ -- Chelsea GCA Realty, Inc. (NYSE: CCG) announced today that it completed the acquisition, in partnership with Fortress Investment Group, LLC, of four manufacturers' outlet centers from Prime Retail, Inc. (NYSE: PRT). Chelsea will provide ongoing operating management, leasing and marketing services for the properties. Merrill Lynch & Co. acted as advisor to Chelsea.
Chelsea has a 49% economic interest in the four properties, which contain 1.6 million square feet of gross leasable area and comprise Prime Outlets at Gilroy, a 578,000 square-foot center in Gilroy, California (San Jose/Silicon Valley region); Prime Outlets at Michigan City, a 491,000 square-foot center in Michigan City, Indiana; Prime Outlets at Waterloo, a 394,000 square-foot center in Waterloo, New York (Finger Lakes region); and Prime Outlets at Kittery, a 131,000 square-foot grouping of outlets in Kittery, Maine. The four centers are currently 99% leased, with tenant sales averaging $335 per square foot during the 12 months ended September 30, 2000.
The total value of the purchase was approximately $240 million, including the assumption of approximately $174 million of non-recourse mortgage debt maturing in 2008. The debt bears a fixed annual interest rate of 6.99%.
David Bloom, Chairman and Chief Executive Officer of Chelsea, said, "These four properties are solid performers that operate in markets in which Chelsea does not. We are pleased to be adding them to our portfolio and intend to re-position them as Premium Outlet centers as soon as possible. Additionally, based on an attractive purchase price and relatively inexpensive long-term debt financing, the transaction should be meaningfully accretive to Chelsea's funds from operations per share even before we add value through management and leasing. Projected income from the four properties adds in excess of 20 cents per share of FFO to our internal estimates for 2001."
Chelsea GCA Realty, Inc. is a fully-integrated, self-administered and self-managed real estate investment trust (REIT) that wholly or partially owns 27 manufacturers' outlet shopping centers -- containing 8.1 million square feet of gross leasable area -- in 15 states and Japan. Portfolio tenant sales averaged $377 per square foot in 1999, among the highest in retail real estate. The Company's leading properties include Woodbury Common Premium Outlets, near New York City; Orlando Premium Outlets, in Orlando, Florida; Wrentham Village Premium Outlets, near Boston; Desert Hills Premium Outlets, near Palm Springs, California; Waikele Premium Outlets, near Honolulu, Hawaii; Gotemba Premium Outlets, near Tokyo; and Rinku Premium Outlets, near Osaka.
This release includes "forward-looking" statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Chelsea GCA believes that the expectations reflected in such statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Forward-looking statements involve known and unknown risks that may cause actual results to differ materially from expected results. Risks include, without limitation, the availability and cost of capital; credit risk; the Company's ability to lease its properties; retail, real estate and economic conditions; risks inherent to being a partner in joint ventures; operating and maintenance risks; competition; and other risks detailed from time to time in Chelsea GCA's reports to the Securities and Exchange Commission. The Company accepts no responsibility for updating forward-looking statements. SOURCE Chelsea GCA Realty, Inc.
CONTACT: Leslie T. Chao, President, or Michael J. Clarke, CFO, 973-228-6111, both of Chelsea GCA Realty, Inc./
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