Cole Real Estate Investments and RED Development Acquire Macerich’s Interests in Arizona Power Centers

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Cole/RED Development Joint Venture Purchases 50% Interests in Two Chandler Power Centers; Cole Acquires Full Ownership of Gilbert Asset Bringing Total Combined Transaction to $100.5 million

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Each of these properties is anchored by nationally recognized, creditworthy retailers contributing solid fundamentals to our portfolio of core retail assets.

Cole Real Estate Investments (Cole), one of the nation’s leading investors in high-quality, income-producing retail, office and industrial real estate, and RED Development, a privately held, wholly integrated real estate company, announced the acquisition of Macerich’s interests in two retail power centers located in Chandler, Arizona. In a related transaction, Cole acquired 100% ownership of a third power center located in Gilbert, Arizona. The transaction value for all three properties is $100.55 million.

As part of an ongoing joint venture, Phoenix-based partners Cole and RED Development are acquiring Macerich’s 50% ownership interests in the Chandler Festival and Chandler Village Center for $31 million and $14.8 million, respectively, for a total purchase price of $45.8 million. RED will serve as onsite property manager and leasing agent for both properties.

Additionally, Cole is acquiring 100% ownership of SanTan Marketplace in Gilbert, AZ, for $54.8 million from Macerich and its investment partner. RED will also act as the leasing agent on this shopping center, while Cole will handle day-to-day property management.

All three assets are considered premier “power” shopping centers within the Southeast Valley submarket, and boast numerous creditworthy tenants with long-term leases.

“These power centers are all primary retail destinations in the Southeast Phoenix trade area and capitalize on the synergy and traffic of nearby regional malls,” said Thomas W. Roberts, executive vice president and head of real estate investments at Cole. “Each of these properties is anchored by nationally recognized, creditworthy retailers contributing solid fundamentals to our portfolio of core retail assets.”

“We are pleased to grow our portfolio to include Chandler Festival and Chandler Village Center, two high-quality, high-performing assets located in a very strong market where RED has developed three retail properties,” said Mike Ebert, managing partner at RED. “We look forward to applying RED’s extensive leasing, management, development and marketing experience to position both assets for future success as we continue to investigate similar acquisition opportunities as part of our joint venture.”

Cole was represented internally by Chuck Vogel, senior vice president, real estate joint ventures, and Clint Marchuk, senior director of acquisitions. RED was represented by Barry Shannahan, vice president of acquisition and development at the firm.

About the Properties
Chandler Festival is a 365,000-square-foot power center in Chandler, AZ, part of the growing Southeast Valley. Situated on the northeast corner of West Chandler Boulevard and Loop 101, Chandler Festival is anchored by TJ Maxx, Ross Dress for Less, buybuy Baby and Nordstrom Rack, and Lowe’s is also located at the center. Other notable retailers include ULTA, OfficeMax and PetSmart, as well as a number of restaurants including Black Angus, KFC, Mimi’s Café, Outback Steakhouse, Chick-Fil-A and In-N-Out Burger.

Chandler Village Center is a 130,000-square-foot power center also located in Chandler, AZ, on the south side of West Frye Road. The property is currently 95% occupied and anchored by Sports Authority, DSW and Bed Bath & Beyond, and is shadow-anchored by Target. Other notable retailers include Kirkland’s, Carter’s and Verizon.

SanTan Marketplace is a 284,500-square-foot power center at the northeast corner of SanTan Village Parkway and South Market Street in Gilbert, AZ, also in the Southeast Valley. The property is currently 91% occupied and is anchored by Jo-Ann Fabrics, Marshalls, Bed Bath & Beyond, Big Lots and DSW. Other notable retailers include OfficeMax, Old Navy, ULTA and Kirkland’s. Walmart and Sam’s Club are also located at the center. 

About the Cole RED Joint Venture
The Cole-RED joint venture, announced in September 2011, brings together Cole’s conservative investment strategy and capital markets access, with RED’s industry-leading in-house leasing, management and development capabilities. The primary acquisition target is high-quality, multi-tenant retail properties, including power centers and grocery-anchored shopping centers, with upside potential through the implementation of asset management and capital improvement programs to reposition the properties and maximize operational efficiencies. The joint venture of the two Phoenix-based firms is targeting investments in the $15 million to $100 million range, primarily in the Midwest and Western United States.

About Cole Real Estate Investments
Founded in 1979, Cole Real Estate Investments is one of the most active acquirers of core real estate assets, managing one of the country’s largest portfolios of retail properties. Cole primarily targets net-leased single-tenant and multi-tenant retail properties under long-term leases with high credit quality tenants, as well as single-tenant office and industrial properties. Cole executes a conservative investment and financing strategy designed to provide investors with the opportunity for stable current income and capital appreciation. At the end of February 2012, Cole-related entities owned and managed more than 1,600 properties representing approximately 60.2 million square feet of commercial real estate in 47 states with a combined acquisition cost of approximately $10 billion.
Follow Cole on Google+ and Twitter @ColeRealEstate and @ColeCapital.

About RED Development
A wholly integrated commercial real estate company, RED maximizes asset value and performance for its high-quality retail and mixed-use portfolio that comprises 32 properties totaling more than 17 million square feet in 12 states. RED is a preferred partner for national retailers and investors, as well as for third-party property owners who turn to RED for its expertise in remerchandising and repositioning properties to improve profitability and appeal. A privately held company with national reach from its two headquarters in Phoenix and Kansas City, RED builds on its development capabilities as an active acquirer of existing properties.

Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements that reflect the current views of Cole Real Estate Investments and Cole’s management with respect to future events. Forward-looking statements about Cole’s plans, strategies and prospects are based on current information, estimates and projections; they are subject to risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Forward-looking statements are not intended to be a guarantee of any event, action, result, outcome or performance in future periods. Cole does not intend or assume any obligation to update any forward-looking statements, and the reader is cautioned not to place undue reliance on them.

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