New Mills Stream

The Mills Corp. (Arlington, Va.) will spend $621 million to acquire six new mall properties around the country.

The operator of 13 megamalls in major U.S. metropolitan areas (through a Real Estate Investment Trust) will soon add to its holdings: the Broward Mall in Plantation, Fla.; the Dover Mall and Dover Commons in Dover, Del.; Galleria in White Plains, N.Y.; Northpark Mall in Jackson, Miss.; The Esplanade in New Orleans; and Riverside Square in Hackensack, N.J.

The first five of these properties were formerly owned by Cadillac Fairview Corp. Ltd. (Toronto), an owner and developer of commercial real estate in Canada and the U.S. Cadillac Fairview is wholly owned by the Ontario Teachers'Pension Plan Board. It owns or manages more than 100 properties, including the Eaton Centre in Toronto, Pacific Centre in Vancouver and the Rideau Centre in Ottawa.

The new purchases alter the traditional Mills model, which is to develop its own properties and fill them with manufacturers'outlet stores, plus multiplex movie theaters and themed restaurants. These new purchases are all enclosed regional malls. In addition to its recent purchase, Mills is building five new malls in the U.S., one in Toronto and its first venture outside North America, a retail/entertainment complex in Madrid.

Mills said in a statement that the company will evaluate each property's retail and entertainment mix, and that it expects to “create additional upside value through key expansions and remerchandisings.” It also said that over the past 18 months, “significant capital” has been spent by the former owners “to add sparkle and luster.”