COLUMBUS, Ohio, March 12, 2018 (GLOBE NEWSWIRE) -- Washington Prime Group Inc. (NYSE:WPG) today announced that it has signed a definitive agreement to acquire through a sale-leaseback transaction four Sears department stores and four adjacent Sears Auto Centers (collectively, the “Properties”) located at Tier One assets. The purchase price is approximately $28.5 million, and Washington Prime Group (the “Company”) expects to complete the acquisition during the second quarter of 2018, subject to due diligence and customary closing conditions.
The Company will have control of these Properties for future redevelopment. Sears will continue to operate the Properties under new leases with the Company. Aggregate base rent under these leases is approximately $1.25 million per annum. In addition, Sears will be responsible for paying common area maintenance charges, taxes, insurance and utilities.
Lou Conforti, CEO and Director stated: “When Washington Prime Group is presented with the opportunity to improve a Tier One asset via retrofit of an underutilized department store space, it is imperative we act accordingly. The first step is to gain control of the space in question, and in this light we have recently agreed to purchase these Properties at competitive terms and conditions. Sears will continue to operate these locations for a period of time that provides us with a suitable timeframe to evaluate the best adaptive reuse.”
“As exhibited by our previous redevelopment successes, the aforementioned acquisition allows us to further our charter of creating hybrid town centers which capture both open air and enclosed retail space as well as assessing the viability for non-retail use,” Conforti added. “I would also like to mention we look forward to working with Sears as they continue their omnichannel transformation and stand ready to assist regarding this undertaking as warranted.”
Upon completion of the acquisition, the Company will have the right to terminate each store lease under certain circumstances as stated in each lease. Termination cannot occur between November 1 of a calendar year and January 15 of the next following calendar year. In the event Sears decides to no longer operate these locations, the Company will have the right to terminate the applicable lease upon thirty days’ prior written notice.
The Properties are located at the following Tier One assets: Longview Mall, located in Longview, Texas; Polaris Fashion Place, located in Columbus, Ohio; Southern Hills Mall, located in Sioux City, Iowa; and Town Center at Aurora, located in Aurora, Colorado.
As part of its ongoing anchor repositioning efforts, the Company plans to redevelop these Properties to further diversify tenancy and strengthen the asset’s dominant positioning within its respective marketplace. Additional details on the redevelopment projects will be announced in the future.
About Washington Prime Group
Washington Prime Group Inc. is a retail REIT and a recognized leader in the ownership, management, acquisition and development of retail properties. The Company combines a national real estate portfolio with an investment grade balance sheet, leveraging its expertise across the entire shopping center sector to increase cash flow through rigorous management of assets and provide new opportunities to retailers looking for growth throughout the U.S. Washington Prime Group® is a registered trademark of the Company. Learn more at www.washingtonprime.com.
Contacts
Lisa A. Indest, CAO & Senior VP, Finance, 614.887.5844 or lisa.indest@washingtonprime.com
Kimberly A. Green, VP, Investor Relations & Corporate Communications, 614.887.5647 or kim.green@washingtonprime.com
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 which represent the current expectations and beliefs of management of Washington Prime Inc. (“WPG”) concerning the proposed transactions, the anticipated consequences and benefits of the transactions and the targeted close date for the transactions, and other future events and their potential effects on WPG, including, but not limited to, statements relating to anticipated financial and operating results, the company’s plans, objectives, expectations and intentions, cost savings and other statements, including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of WPG’s management, and involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of WPG to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, without limitation: changes in asset quality and credit risk; ability to sustain revenue and earnings growth; changes in political, economic or market conditions generally and the real estate and capital markets specifically; the impact of increased competition; the availability of capital and financing; tenant or joint venture partner(s) bankruptcies; the failure to increase mall store occupancy and same-mall operating income; risks associated with the acquisition, development, expansion, leasing and management of properties; changes in market rental rates; trends in the retail industry; relationships with anchor tenants; risks relating to joint venture properties; costs of common area maintenance; competitive market forces; the level and volatility of interest rates; the rate of revenue increases as compared to expense increases; the financial stability of tenants within the retail industry; the restrictions in current financing arrangements or the failure to comply with such arrangements; the liquidity of real estate investments; the impact of changes to tax legislation and WPG’s tax positions; failure to qualify as a real estate investment trust; the failure to refinance debt at favorable terms and conditions; loss of key personnel; material changes in the dividend rates on securities or the ability to pay dividends on common shares or other securities; possible restrictions on the ability to operate or dispose of any partially-owned properties; the failure to achieve earnings/funds from operations targets or estimates; the failure to achieve projected returns or yields on development and investment properties (including joint ventures); expected gains on debt extinguishment; changes in generally accepted accounting principles or interpretations thereof; terrorist activities and international hostilities; the unfavorable resolution of legal proceedings; the impact of future acquisitions and divestitures; assets that may be subject to impairment charges; significant costs related to environmental issues; and other risks and uncertainties, including those detailed from time to time in WPG’s statements and periodic reports filed with the Securities and Exchange Commission, including those described under “Risk Factors”. The forward-looking statements in this communication are qualified by these risk factors. Each statement speaks only as of the date of this press release and WPG undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. Actual results may differ materially from current projections, expectations, and plans, if any. Investors, potential investors and others should give careful consideration to these risks and uncertainties.