PREIT and The Macerich Company Form Joint Venture To Redevelop The Gallery In Philadelphia, Macerich To Pay $106.8M for 50% Of The Gallery
Pennsylvania Real Estate Investment Trust (PREIT/NYSE: PEI) and Macerich Company (Macerich/NYSE: MAC) today announced a joint venture partnership to redevelop The Gallery in downtown Philadelphia. Through this partnership, PREIT will capitalize on Macerich's extensive expertise in developing and leasing vertical, multi-use projects in dense, urban environments and Macerich will benefit from PREIT's Philadelphia-area relationships and retail dominance.
Under the terms of the agreement, Macerich will acquire a 50% common ownership interest in The Gallery for $106.8 million. Macerich and PREIT will jointly handle the development, leasing and management of The Gallery. Costs related to the future development will be split 50/50 between the companies.
The Gallery, approximately 1,400,000 square feet is located in the heart of Philadelphia, strategically positioned where mass transit, tourism, the residential population and employment base converge. The joint venture redevelopment is expected to build upon the offerings of the previously announced Century 21 anchor transaction and realize PREIT's vision to create Philadelphia's only transit-oriented, retail anchored multi-use property offering accessible luxury retailing and artisan food experiences.
"We are thrilled to be partnering with Macerich, an established developer and operator, to bring a one-of-a-kind, premier center to Philadelphia," said Joseph F. Coradino, CEO of PREIT. "Macerich has a proven track record of developing leading properties in attractive U.S. markets and we look forward to leveraging their deep experience and strong leasing relationships to unlock significant value in The Gallery. This joint venture allows PREIT to maintain a strong balance sheet and minimize execution risk as we continue to capitalize on strategic opportunities to enhance our portfolio, for the benefit of all PREIT shareholders."
Art Coppola, Chairman and CEO of Macerich commented, "This joint venture represents a great opportunity to participate in one of the top real estate markets in the United States with a high quality asset. The Gallery is aligned with the type of assets we look for; it has dominant positioning and strong long-term growth prospects. I look forward to working closely with the management team at PREIT as we combine our knowledge and skills to create an unparalleled shopping and dining environment for shoppers."
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