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Agreement to Buy Galleria Reported

General Growth is the acquirer, sources say. The price is expected to exceed $400 million.

October 26, 2002|Jesus Sanchez | Times Staff Writer

Mall giant General Growth Properties Inc. has agreed to buy the Glendale Galleria, one of Southern California's largest shopping centers, according to people familiar with the property.

The 250-store mall will dramatically raise General Growth's presence in the Los Angeles area, where the company owns or manages about half a dozen shopping centers. None of them approaches the Galleria's sales, which is $525 per square foot annually, among the highest in the nation, industry observers said. The price is expected to exceed $400 million, in line with other mall transactions.

"This is a pretty solid property, and it has a significant market draw," said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. "This is something that [any mall operator] would want to lay their hands on."

Daniel Donahue, chairman of the mall's management company, Donahue Schriber, would not identify the buyer. But he confirmed that a publicly traded company was in escrow to purchase the mall and had until Nov. 1 to complete its due diligence. The 1.5-million-square-foot shopping center is a joint venture that includes health insurer Cigna Corp. and the New York State Teachers' Retirement System.

Executives at Chicago-based General Growth, a real estate investment fund, could not be reached for comment. The firm owns or manages 163 shopping malls nationwide, including the Baldwin Hills Crenshaw Plaza in Los Angeles, Media City Center in Burbank and Montclair Plaza in Montclair.

The Galleria, which sprawls over two blocks in the heart of Glendale, joins a long list of major shopping center properties that have traded hands in recent months as investors pay top dollar for well-located malls.

The Glendale Galleria has remained a top draw as its owners have continually expanded the 26-year-old property, attracted new retailers and experimented with new concepts, such as a section devoted to young shoppers called the Zone.

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