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Investor Larry Feldman Acquires the Foothills Mall in Tucson, AZ
Prized Center Brings Portfolio to 1.4 Million Sq. Ft. for Former REIT Leader
Tucson, AZ (April 11, 2002) - Larry Feldman, renowned real estate developer and visionary force behind one of the nation's most successful real estate investment trusts during the late 1990s, announces today his latest acquisition with the purchase of the Foothills Mall, in Tucson, Arizona. Mr. Feldman, together with his partners acquired the 482,351-square-foot entertainment and retail center from FHM Development LLP, a subsidiary of Hillwood Development Corp. The purchase price was $54 million for the purchase of certain business interests, management operations, vacant land parcels and the mall property. In addition, Feldman Equities, together with its partners, is investing another $4,500,000 in various costs related to the transaction, including a multi-million dollar budget to renovate, upgrade, promote and expand the mall.
Mr. Feldman, president and CEO of Feldman Equities, cited this purchase as the continuation of an aggressive program to re-build the Feldman Equities portfolio, especially in the markets of Tucson and Phoenix, where he has long invested in commercial real estate. This acquisition also marks Mr. Feldman's return to significant real estate investment on the private level, following the formation, growth and successful disposition of Tower Realty Trust, a leading publicly traded REIT.
Mr. Feldman acquired Foothills Mall with his long-time Arizona partners, Scott Jensen and James Bourg. In addition, Paul and Bruce Ash of Paul Ash Management Company LLC, a multi-family and commercial real estate company with over 40 years of investment and development experience throughout southern Arizona, is a partner in the transaction. They said, "We believe our timing is excellent with this acquisition and are excited about working with Mr. Feldman's organization and making the Foothills Mall a premier property in Northwest Tucson."
Foothills Mall, located at the intersection of La Cholla Boulevard and Ina Road, consists of 482,351 square feet of current retail space with future expansion capability for an additional 144,820 square feet, including five developable pad sites. The mall is currently 95% occupied and is adjacent to a highly successful 210,530 square-foot Wal-Mart super store.
Foothills Mall is a successful and established entertainment and discount retail indoor/outdoor mall anchored by well known national credit tenants, including Barnes & Noble, Linens & Things, Saks Off 5th Ave, Ross Dress for Less and Nike Factory Store. In addition to the retail anchors, the mall is home to a 15-theater Loews Cineplex with sales ranked in the top 10 percent for the national theater chain. The Foothills Mall is among the top three retail properties in Tucson and is the most strategically located in Tucson's rapidly expanding northwest market area. Five development pads at the 44-acre property are currently being marketed for build-to-suit or sale to well-known national retailers.
"Foothills Mall - already recognized as an outstanding property - nonetheless holds tremendous upside potential through the implementation of a major renovation plan and an aggressive leasing campaign to attract new tenancy and retain its many existing quality tenants," said Mr. Feldman. "With over 70% of the tenancy comprised of credit tenants and the mall's tremendous expansion potential, this is exactly the type of property Feldman Equities is currently targeting under our Arizona focused acquisition plan."
Feldman Equities now owns or manages over 1.4 million square feet of retail and office space in Arizona and Florida. The company also owns land upon which it can develop up to an additional million square feet retail and office property.
"We are confident that discount retail malls will continue to be successful through a possible recession era, as tightened disposable personal income will migrate to these discount retailers vs. the high-end retailers," said Mr. Feldman, who's hands-on approach to turning around distressed assets, combined with deep bricks-and-mortar sensibility, have earned him a national reputation with investors for being ahead of the market and producing returns averaging total returns in excess of 30 percent.
The seller, Hillwood Development Corp., a Perot Company and one of the country's top real estate developers and investors, owned the mall in joint venture with General Electric Capital Corp.
An affiliate of Feldman Equities, Inc., is the general partner of the purchaser. Feldman Equities is the modern business entity that encompasses a century of success in commercial real estate development, management and ownership throughout the United States. In the last 20 years, Larry Feldman, together with his father Edward Feldman and his partners Scott Jensen and James Bourg, have developed or acquired over 10 million square feet of office and retail properties with an aggregate value in excess of $2 billion. Feldman Equities is a standout, recognized for its trademark adept hands-on approach to turning around distressed assets. Finding success, time and time again, while remaining on the cutting edge of investment and development trends, Feldman Equities is marshaled by its visionary president and CEO, Larry Feldman. Today, Feldman Equities owns a portfolio of office and retail properties and land for development in Arizona and Florida -- and is keenly poised for a period of strong asset growth in these markets and others.