Taubman Centers, Inc. ( TCO ) recently announced that it has acquired The Mall at Green Hills, The Gardens on El Paseo and El Paseo Village. The company acquired these properties from Davis Street Properties for a total consideration of $560.0 million.
The consideration consists of the assumption of $206 million in debt, $281 million in installment notes and the remaining 1.3 million partnership units related to The Taubman Realty Group Limited Partnership.
The Mall at Green Hills is a fashion shopping center in Nashville. The mall has been expanded and renovated various times and recently the mall got its first Nordstrom store, spanning 149,000 square feet. On the other hand, The Gardens on El Paseo and El Paseo Village anchor El Paseo Avenue, which dominates the high-end retail market in Coachella Valley, a renowned tourist destination. With the addition of these assets, Taubman Centers has enhanced the quality of its portfolio.
Taubman reported third quarter 2011 FFO (funds from operations) of $54.1 million or 63 cents per share, compared to $49.2 million or 59 cents per share in the year-earlier quarter. Fund from operations - a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income, while adjusted FFO excludes impairment and restructuring charges.
Michigan-based Taubman Centers is a real estate investment trust (REIT), which owns, develops, acquires and operates regional and super-regional shopping centers throughout the U.S. and Asia.
Taubman Centers has a strong portfolio of the best-in-class retail malls that generate the highest average sales per square foot in the country. Consequently, the company is relatively better placed than most of its peers to withstand the challenges of the macroeconomic environment.
Taubman Centers currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Simon Property Group Inc ( SPG ) also holds a Zacks #3 Rank.