TIAA-CREF and APG announce USD1.5bn real estate joint venture

TIAA-CREF and APG have formed a super-regional mall joint venture that is 51 per cent owned by TIAA-CREF and 49 per cent owned by APG.

The TIAA-CREF-APG joint venture has acquired interests in four properties containing 4.6 million square feet of gross leasable space with mall operator CBL & Associates Properties, Inc. CBL +5.11% and one property containing 1.2 million square feet of gross leasable space with the Westfield Group (asx:WDC). Together, the five properties in which the joint venture is invested have a gross valuation in excess of USD1.5 billion.

TIAA-CREF and APG's joint venture targets dominant super-regional malls located in major US markets -- generally those within the top quartile of super-regional mall assets -- through joint venture acquisitions with major mall operators.
Today's announcement advances TIAA-CREF's strategy of managing assets in partnership with sophisticated global investors from around the world.

"This relationship demonstrates the strength of our global real estate platform and our ability to partner with leading institutional investors to seek what we see as the most attractive real estate assets in the market today," says Scott Kempton, managing director, Global Real Estate Portfolio Management at TIAA-CREF. "We believe that this venture will allow us to continue to capitalise on opportunities we see in the super-regional mall sector."

"This partnership with TIAA-CREF combines the strength of two global investment platforms to pursue dominant US mall assets with best-in-class operators. The venture is a continuation of APG's strategy to invest with partners that have similar long-term investment objectives and the right mix of demonstrated management capabilities coupled with exceptional alignment of interests," says Steven Hason, managing director, Co-Head of Americas Real Estate at APG. "Following recent acquisitions in Europe, this joint venture enables us to expand and complement our global portfolio of leading shopping center destinations."

The first investment of the TIAA-CREF-APG joint venture is in the following properties: Oak Park Mall in Kansas City, KS; West County Center in St. Louis, MO; CoolSprings Galleria in Nashville, TN and Pearland Town Center in Pearland, TX with CBL & Associates Properties, Inc., and Westfield Montgomery in Bethesda, MD with the Westfield Group.

"We see dominant regional malls as being an important part of a well-diversified real estate portfolio, with the ability to provide durable income streams and long term value," says Kempton.

TIAA-CREF directly owns over USD17 billion (6/30/11) of primarily high-quality properties in the office, retail, industrial and multifamily sectors across the US, Canada, and Western Europe.