Two major mall operators, Brookfield Property Partners and GGP, are merging in a $9.25 billion all-cash deal.

GGP, once known as General Growth Properties, is already considered the second largest mall operator in the United States, behind Simon Property Group. At the end of last year, it owned, either entirely or with joint venture partners, 125 retail properties located throughout the United States, comprising approximately 122 million square feet.

Among the malls owned by Chicago-based GGP are Ala Moana Center in Honolulu; Tysons Galleria in McLean, Va.; Glendale Galleria in Los Angeles; and Water Tower Place in Chicago.

This new combined entity will be one of the world’s largest commercial real estate enterprises, according to a statement, with $90 billion in total assets and a net operating income of more than $4 billion.

Before this transaction, Brookfield owned 34 percent of GGP. It will pay $23.50 a share to own the rest of the company. It had been in negotiations to buy the rest of the company since November.

Acquirer Brookfield Property Partners is one of the world’s largest commercial real estate companies, with approximately $68 billion in total assets. In 2015, it bought Rouse Properties, giving it control of 35 malls and retail centers in 21 states.

The merger still has to be approved by GGP’s shareholders. A specially formed committee voted unanimously in favor of the deal.

“This is a compelling transaction that enables GGP shareholders to receive premium value for their shares and gives them the ability to participate in the long-term upside of their investment,” said  Brian Kingston, CEO of Brookfield Property Partners, in a statement. “We are pleased to have reached an agreement and are excited about combining Brookfield’s access to large-scale capital and deep operating expertise across multiple real estate sectors with GGP’s portfolio of irreplaceable retail assets.”

(Image of Ala Moana Center courtesy of Wikipedia)

Rob Bates

JCK News Director