Macerich, General Growth swap boxes, properties and $75 million in cash

Macerich solidified its position as the area's dominant mall owner in a property swap deal with General Growth Properties. Per the deal, Macerich will buy out General Growth's 33% ownership interest in two area malls, Superstition Springs Mall and Arrowhead Towne Center. In exchange, Macerich will give General Growth ownership of six anchor stores (two of which are still-vacant former Mervyn's stores) at General Growth-owned properties in Arizona, California, Illinois and Utah, plus $75 million in cash. General Growth will use the $75 million to pay off debt and reinvest in core properties, according to CEO Sandeep Mathrani. It will also consider moving forward with plans to redevelop some of the properties now that it controls the anchor space and associated parking lot square footage, he said. The two Phoenix malls average more than $430 per s/f in annual sales, are over 95% occupied and are anchored by Dillard's, J.C. Penney, Macy's and Sears. Macerich had been trying to negotiate a deal with General Growth since 2002 when it acquired the majority of the two malls through its purchase of Westcor, Edward Coppola, Macerich's president, told an investor conference in New York this week. General Growth's new leadership was finally receptive to a deal, he said. "We sat down with Sandeep and he was very rational," Coppola said. He added that Macerich will continue to use its healthy balance sheet to buy properties within the next two or three years, though he warned his firm is looking at off-the-RADAR deals, not "the heavily marketed ones."