NEW YORK (Reuters) - Macerich Co (MAC.N) said on Monday it would expand its New York holdings by purchasing a Long Island mall from Vornado Realty Trust (VNO.N) and a Brooklyn mall from Vornado affiliate Alexander’s Inc (ALX.N).
Vornado put Green Acres Mall in Valley Stream, Long Island, and its interest in King’s Plaza Mall in Brooklyn on the block as part of plan to focus on its core business - office buildings in New York and Washington and street-level stores.
Macerich, a real estate investment trust, has struck a deal to buy Kings Plaza, a 1.2 million square-foot mall, for $751 million. Tenants’ sales average about $650 per square foot annually. The transaction is expected to close by year-end.
Vornado will record a $202 million tax gain from the deal. It said it would distribute the gain to shareholders as a special long-term capital gain dividend.
Macerich struck a deal to buy Green Acres, a 1.8 million-square-foot mall, from Alexander’s for $500 million. The mall is 94 percent occupied and records tenant sales of $520 per square foot annually.
Vornado owns about a third of Alexander‘s. A company run by Vornado executives owns another third.
Vornado said it would record a tax gain of $304 million from the deal.
The Green Acres deal is expected to close in the first quarter of 2013 and is conditioned on the closing of the Kings Plaza sale.
Shares of Macerich were down 1.5 percent at $58.00 in Monday morning trade. Vornado shares fell 0.2 percent to $81.10. Alexander’s shares rose 3.5 percent to $434.11. All three companies trade on the New York Stock Exchange.
Reporting By Ilaina Jonas; editing by John Wallace