Ala Moana owner sells another piece of mall

Ala Moana Center now has three owners, following a second sale of a minority interest in Hawaii’s largest shopping mall by General Growth Properties.

Chicago-based General Growth announced the sale of a 12.5 percent stake in the mall to New York-based pension and financial services firm TIAA-CREF for $454 million in an earnings report Monday.

The sale follows a 25 percent stake in the mall that General Growth sold to AustralianSuper, a pension fund for workers in Australia, for $907 million in March.

Proceeds from the two sales are offsetting a roughly $650 million investment General Growth is making in Ala Moana to enlarge the Ewa wing of the retail complex for Hawaii’s first Bloomingdale’s department store and about 80 other tenants, including a relocated Nordstrom.

The expansion will add about 660,000 square feet of retail space, along with more parking, to the existing roughly 2.2 million square feet of retail and office space at the center.

General Growth, which will continue to manage the mall, has received three-quarters of the proceeds from the two sales. The balance is due in late 2016 after substantial completion of the mall expansion.

The recent sales represent a new era in the ownership of Ala Moana, which General Growth bought in 1999 from Japa­nese retail giant Daiei Inc. for $810 million.

The present value of the mall is about $5.5 billion based on the price of the two sales and a mortgage on the property.

Ala Moana, which generates one of the highest levels of sales in the retail industry at $1,350 per square foot of store space, used to be General Growth’s largest wholly owned property.

The company owns 128 retail properties, including two others in Hawaii: Prince Kuhio Plaza on Hawaii island and Whalers Village on Maui.

TIAA-CREF, which manages $866 billion in assets, said in a statement that Ala Moana is in a category of top-quality regional malls that make good investments.

"This investment represents the opportunity to acquire an interest in one of the highest-performing retail assets in the world," said Mike Fisk, senior director of regional mall acquisitions for TIAA-CREF’s global real estate arm.

Two years ago TIAA-CREF bought a 50 percent stake in another General Growth property, The Grand Canal Shoppes within The Venetian and The Palazzo hotel and casino complex in Las Vegas, for $410 million.