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May. 24, 2013

TIAA-CREF Takes 50% Stake in Grand Canal Shoppes; GGP Reaps $410M

By Alex Girda, Associate Editor

A recent recapitalization underscores the appeal of trophy Las Vegas retail properties to institutional investors. TIAA-CREF has acquired a 50 percent stake in the Grand Canal Shoppes, including the Shoppes at Palazzo, from General Growth Properties Inc. The transaction generated approximately $410 million in net proceeds, according to a joint statement issued May 16 by GGP and TIAA-CREF.

Part of the Venetian and Palazzo complex, The Grand Canal Shoppes offers 774,000 square feet of gross leasable area that generates more than $1,000 per square foot. TIAA-CREF’s newly acquired stake involves only the retail component of the complex.

Besides retaining 50 percent ownership, General Growth will continue to serve as the property’s manager and primary leasing agent. Grand Canal Shoppes had a 99 percent occupancy rate at the time the deal closed.

TIAA-CREF’s retail growth strategy focuses primarily on regional properties offering strong revenue streams. Its portfolio, which includes office, retail, industrial and multifamily properties on both sides of the Atlantic, is currently valued at $33 million.

Image courtesy of thegrandcanalshoppes.com