This report from the Wall St. Journal - price works out to a 4% cap. Clear confirmation of Boiler's thesis that brick and mortar retail is dead (not - smirk!). And guess who owns the the other 50% - SPG, ahh the irony:
"The real-estate asset-management arm of Deutsche Bank AG has purchased a 50% stake in a Florida mall at one of the highest prices paid for a mall since the downturn.
Deutsche Asset & Wealth Management paid $375 million for half of St. Johns Town Center, a large open-air shopping mall in Jacksonville whose tenants include Louis Vuitton, The Gap and an Apple Store. The deal values the 621,000 square-foot mall at $750 million, not including some $270 million in debt on the property, according to several people familiar with the transaction."
Sadly, SPG didn't own the piece that was sold - although if Simon were the owner there would not have been a sale in the first place. The owner is an Atlanta developer named Ben Carter, so no pay-down of debt or special dividend. No doubt the high price could presage a top - but I think we will remain at the top for a while. Pricing is due to low interest rates, which are likely to persist for some time longer (although, the more this is the consensus view, the less confident I am it will play out as expected) and the fact that there are very few investment grade retail properties trading. Most of the major retail assets in the US are already owned by institutions and the big REIT's - and they aren't sellers. Firms seeking to increase their retail holdings have few opportunities and prices get bid up as a result of intense competition for the few properties that do come to market.