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Simon to buy $569M stake in European mall operator

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Simon Property Group Inc., the largest U.S. mall owner, has agreed to invest $569 million in closely held McArthurGlen Group, Europe’s biggest outlet-center operator.

Simon, based in Indianapolis, will gain an ownership stake in six McArthurGlen properties and become a partner in the London-based firm’s real estate management and development business, the companies said in a prepared statement Monday. The investment will include properties in Austria, the Netherlands, Italy and the United Kingdom.

McArthurGlen “has one of the best-performing portfolios of high-quality retail real estate assets in Europe,” David Simon, chairman and CEO of Simon Property, said in the statement. “This venture supports and extends our international growth strategy.”

Simon, the largest owner of U.S. outlet centers, also operates similar properties in Asia and has a minority stake in European mall owner Klepierre SA, which is based in Paris.

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  • What?
    Neal...last time I checked, David Simon has increased the value of Simon Property immensely. Compare the stock price and overall value of the company when he took over to what it is now. In general, I think I'd say he has proven that he knows what he's doing. I'll trust his track record over your snarky anonymous comment.
  • Uhhhh
    Simple Simon invests in a dying business on a dying continent where unemployment is north of 30%. Brilliant Hoosier ingenuity. Dear, dear, David. Just when you think it can't get worse, it does.

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    1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

    2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

    3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

    4. If you only knew....

    5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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