QIC, one of Australia’s largest institutional investment managers, has acquired The Shops at Tanforan in San Bruno, California for $174.4m, about 80% of which is assumed debt.
The purchase was made on behalf of a QIC affiliate, explaining reports that the acquisition was made for a “client” but also marked QIC’s first “100-percent owned” US property, sources confirmed.
About $138m of the purchase price is assumed, securitized debt from the Banc of America Commercial Mortgage Trust (BACM), series 2007-1 CMBS securitization.
The original 10-year, $144m loan was made in February of 2007 to the seller, Amsterdam-based real estate investor Breevast B.V., refinancing the property. It carries a 6.1% fixed rate and had an original loan-to-value of 77%. The debt makes up a sliver of the $300bn worth of securitized loans that will come due through 2017, signaling that another refinancing could soon be underway.
The 970,000 sq ft shopping center, located 13 miles south of San Francisco, includes Sears, Target, JCPenney and Century Theatres as anchor tenants.
“The US market is opportunity rich, and the combination of QIC’s on-the-ground office in Los Angeles and teams around the world will continue to enable us to source high-quality assets,” said Matthew Strotton, head of US Funds and Investments at QIC.
Breevast purchased the mall with intentions for redevelopment in 1999, but renovations only began in 2003 after a string of legal and construction issues. Most of the existing structure was razed and underwent a $140m reconstruction.
QIC is one of the largest institutional investment managers in Australia, with $56.7bn in funds under management and 90 clients, including governments, pension plans, sovereign wealth funds and insurers, spanning Australia, Europe, Asia, the Middle East and the US.
Earlier this year, QIC assisted AustralianSuper – one of Australia’s largest pension funds – to acquire a 25% stake in Honolulu’s Ala Moana Centre for approximately $1.1bn.