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Chelsea Property Group, Inc. (ticker: CPG, exchange: New York Stock Exchange) News Release - 30-Sep-2002
Chelsea Property Group to Acquire Two Properties for $89.5 Million
ROSELAND, N.J., Sep 30, 2002 (BUSINESS WIRE) -- Chelsea Property Group, Inc. (NYSE: CPG) announced today that it signed a definitive agreement to acquire two outlet centers from Muskegon, Michigan-based JMJ Properties, Inc. for a total price of approximately $89.5 million. The two properties are Outlets at Albertville, in Albertville, Minnesota; and Johnson Creek Outlet Center, in Johnson Creek, Wisconsin.
Outlets at Albertville is located approximately 20 miles to the northwest of Minneapolis-St. Paul on Interstate 94, and is the dominant outlet center serving the Twin Cities market. It opened in April 2000 with an initial phase of 250,000 square feet of gross leasable area, and was expanded to its current size of 305,000 square feet in the summer of 2001. The center is currently 100% leased, with tenants including Polo Ralph Lauren, Tommy Hilfiger, Brooks Brothers, Nike, Carters Childrenswear, GAP Outlet, Banana Republic and Old Navy. Sales for the trailing 12 months averaged more than $350 per square foot. The purchase includes an option to purchase additional land that will support further expansion of up to 130,000 square feet of GLA.
Johnson Creek Outlet Center is located on Interstate 94 at Highway 26, midway between Madison and Milwaukee, Wisconsin. It opened in May 1998 with a first phase of 170,000 square feet of GLA, and was expanded in 1999 and 2001 to its current size of 278,000 square feet. The center is currently 97% leased, with tenants including GAP Outlet, Brooks Brothers, Liz Claiborne, Nike, Eddie Bauer, Old Navy, Bose and Tommy Hilfiger. Trailing 12-month sales averaged approximately $245 per square foot. The purchase price includes land that will support 20,000 square feet of further expansion.
The total purchase price for the two properties comprises the assumption of $22.3 million of mortgage debt (bearing interest at 7.76% and due in 2011) on the Johnson Creek center; and cash and limited partnership units in CPG Partners, L.P. valued at a total of $67.2 million. Partnership units in CPG Partners, L.P. are convertible on a 1-for-1 basis to common shares of Chelsea Property Group, Inc.
The transaction is subject to due diligence and is expected to close in 45-60 days.
David Bloom, Chairman and Chief Executive Officer of Chelsea, said, "We are pleased to have the opportunity to add these properties to the Chelsea portfolio. They are the leading outlet centers in their respective markets. Outlets at Albertville has been a particularly strong performer since its opening, and has consistently been ranked among the top twenty outlet centers nationally. This acquisition will strengthen our presence in the midwest and, in addition to being immediately accretive, will also offer longer term upside in terms of re-tenanting and expansion potential."
Chelsea Property Group, Inc. is a fully integrated, self-managed and self-administered real estate investment trust (REIT) that wholly or partially owns 53 Premium Outlet(R) and other shopping centers - containing approximately 12.5 million square feet of gross leasable area - in 28 states and Japan. The Company's leading properties include Woodbury Common Premium Outlets, near New York City; Orlando Premium Outlets, in Orlando, Florida; Desert Hills Premium Outlets, near Palm Springs, California; Wrentham Village Premium Outlets, near Boston; and Gotemba Premium Outlets, near Tokyo, Japan. Please see www.cpgi.com for more information.
Statements in this news release that are not strictly historical are "forward-looking" statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although Chelsea Property Group believes 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. Risk factors include, without limitation: credit risk; the Company's ability to lease its properties; retail, real estate and economic conditions; competition; transaction closing risks; and other risks detailed from time to time in Chelsea Property Group's reports to the Securities and Exchange Commission. The Company accepts no responsibility for updating forward-looking statements.
CONTACT:
Chelsea Property Group, Roseland
Leslie T. Chao or Michael J. Clarke
973/228-6111
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