- The Washington Times - Wednesday, December 9, 2009

DES MOINES, Iowa | Simon Property Group Inc. said Tuesday that it will buy the outlet shopping centers owned by Prime Outlets Acquisition Co., solidifying its position as the nation’s largest public real estate company.

Indianapolis-based Simon is paying $700 million in cash and securities. The company said that including the assumption of debt and preferred stock, the deal is valued at $2.33 billion.

Prime Outlets, based in Baltimore, owns, operates and develops 22 outlet centers in major metropolitan areas, including Washington and Orlando, Fla.

Once the deal is completed, Simon will have 63 outlet centers with about 25 million square feet.

Simon also owns regional malls and other assets. At the end of the third quarter, the company owned 387 properties with 262 million square feet, including sites in Europe and China.

Simon Property shares rose 78 cents, or 1.1 percent, to close at $74.68 on Tuesday.

Simon expects the transaction to add immediately to its funds from operations, a widely used gauge of real estate operating performance.

In October, Simon reported funds from operations improved in the third quarter on lower expenses, but occupancy at regional malls and premium outlets slipped about 1 percent. The company tried to make up some of the lost revenue by charging more rent per square foot.


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