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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowSimon Property Group Inc., the world’s largest mall owner, bought a land parcel on New York’s Long Island from rival shopping-center landlord Taubman Centers Inc., which failed to develop the property.
The 39-acre plot near the Long Island Expressway in Syosset had been slated for the Mall at Oyster Bay, according to a statement by Bloomfield Hills, Mich.- based Taubman. Simon also purchased the company’s 50-percent stake in Arizona Mills, a shopping center in Tempe, Arizona, built in 1997. Taubman received $230 million in Simon Property shares and $60 million in cash for the two transactions.
The Long Island property is “great real estate,” David Simon, Indianapolis-based Simon Property’s chairman and CEO said Friday on the company’s fourth-quarter earnings conference call. “We’re going to work with the residents to come up with a development plan.”
The real estate investment trust is focused on redeveloping its top regional malls, opening outlet centers and investing overseas to boost growth, and plans to spin off 44 of its smaller malls and its strip center business into a separate publicly traded company.
Simon said Friday that fourth-quarter funds from operations rose 8.1 percent from a year earlier as occupancies at its U.S. malls and outlet stores climbed.
Taubman spent about 20 years attempting to build a mall on the Oyster Bay site, Alexander Goldfarb, an analyst at Sandler O’Neill & Partners LP, wrote in a note to clients Friday.
“Despite our best efforts and continuing enthusiasm for the opportunity, it became apparent that we were not going to be able to move forward anytime soon,” Robert Taubman, chairman and CEO of Taubman Centers, said in the statement.
Simon more than a decade ago dropped an unsolicited takeover offer for Taubman after Michigan enacted a law allowing the Taubman family to block the effort. Last year, the companies opened competing outlet malls in a suburb of St. Louis.
“Even though we obviously have had issues over the years with Taubman, we’ve always had what I’d call a good professional relationship,” David Simon said on the call. “The dust has settled from several years ago.”
Simon also this month bought its joint-venture partners’ remaining interest in 10 properties including King of Prussia Mall in Pennsylvania. The company now owns 100 percent of that property.
Shares of Simon Property rose 1.2 percent Friday, to $154.84 per share, while Taubman gained 1.4 percent to $65.02.
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