Rouse Co. is negotiating with several venture partners to finance up to half of its pending $1.1 billion acquisition of seven shopping malls -- including Towson Town Center -- from a Toronto real estate company.
The Columbia-based real estate investment trust, which in April announced plans to buy the malls from TrizecHahn Corp., is talking with various pension funds about financing part of the acquisition.
"We've said from the beginning that we don't want to go above a 55 percent debt-to-equity ratio," said David L. Tripp, a Rouse vice president and director of investor relations. "So we'd have -- to either raise $500 million or bring in partners. It's typical."
In the past, Rouse has turned to numerous sources, including Teachers Insurance & Annuity Association, Cigna Corp., JMB Realty and Rodamco N.V., to finance projects such as its original 15,000-acre planned development of Columbia.
Rouse said in July that it had secured $800 million in bank financing to complete the TrizecHahn purchase, a move intended to give it "flexibility" in determining whether to sell common stock, use bank debt or bring in partners for the deal. But the REIT hasn't yet tapped that money, Tripp said.
Rouse could bring in partners for either "several hundred million dollars" or "as much as half" of the deal, Tripp said. TrizecHahn's other malls are in Denver; Las Vegas; Salt Lake City; Bridgewater, N.J.; and Cedar Rapids, Iowa. The malls will add 6.5 million square feet to Rouse's portfolio of 53 regional shopping hubs.
The REIT hopes to announce within the next few weeks whether venture partners will be part of the TrizecHahn deal, Tripp said.
"We've talked to a number of different parties and we've had more than reasonable interest," Tripp said.
Pub Date: 9/29/98