Westfield America, Inc. (NYSE:WEA) partners With J.P. Morgan on Flagship Properties – the companies form joint venture in Westfield Shoppingtowns Valley Fair and UTC


Countries: United States

Los Angeles, CA, June 23, 1999 – Westfield America, Inc. (NYSE: WEA) announced today that it has formed an approximately $500 million joint venture with J.P. Morgan Investment Management, Inc. for two of its premier regional shopping malls: Westfield Shoppingtown Valley Fair, in San Jose, CA, and Westfield Shoppingtown UTC (formerly known as University Towne Centre), in La Jolla, CA. J. P. Morgan will acquire a 50 percent interest in the properties for approximately $130 million in equity plus the assumption of approximately $120 million in debt.

“When we sold Los Cerritos to Macerich and purchased the remaining 50 percent interest in Valley Fair from the Rouse Company in May, it was our intention at that time to bring in a joint venture partner to help underwrite Valley Fair’s redevelopment,” said Peter Lowy, president, Westfield America. “This joint venture not only will help us to finance the expansion currently underway at Valley Fair, but also will enable us to reduce debt and free up capital to finance the future growth of the company.”

“We are excited about the opportunity to invest in two of the premier shopping centers on the West Coast with a first-class regional mall operator with an unmatched franchise in California,” said Larry Ellman, member of J.P. Morgan Investment Management’s acquisition team responsible for the transaction. “The centers are leaders in two markets which offer some of the most attractive demographics in California. The expansion of Valley Fair will further solidify its position in the Silicon Valley and should provide the partnership with significant near-term value creation. We believe that this transaction will provide our investors with attractive long-term returns and represents a continuing expansion of our national retail investment program.”

A $150 million redevelopment is underway at Westfield Shoppingtown Valley Fair. The redevelopment will include a 225,000 square foot Nordstrom and approximately 275,000 square feet of specialty stores. It will be completed in stages with total project completion planned for fall 2001. The construction of a new parking structure adding 1400 spaces was completed in early June. Construction financing is being provided by CIBC World Markets and HypoVereinsbank AG.

Westfield Shoppingtown Valley Fair is one of the premier regional shopping malls in the country. It was opened in 1986 and has 1,140,000 square feet. It is anchored by Nordstrom and two Macy’s stores, and has 158 specialty stores. Total sales in 1998 at Valley Fair were $522 million and the specialty stores produced $648 per square foot of sales.

A super regional shopping mall with 1,035,000 square feet, Westfield Shoppingtown UTC was opened in 1977 and is anchored by Nordstrom, Macy’s, Robinsons-May and Sears. It has 162 specialty stores. Total sales in 1998 at UTC were $309 million and the specialty stores produced $393 per square foot of sales.

Westfield acquired both centers last year as part of its acquisition of the TrizecHahn portfolio.

Westfield America, Inc. (NYSE: WEA – news), a real estate investment trust, is one of the nation’s leading owners of regional shopping centers. The company owns interests in 37 major shopping centers, branded Westfield Shoppingtowns. Westfield Shoppingtowns are home to more than 4,600 specialty stores, serve 10% of the U.S. population and comprise 34.6 million square feet of leasable space in California, Colorado, Connecticut, Maryland, Missouri, New York, North Carolina and Washington.