Los Angeles and New York City — HBS Global Properties has purchased the 41-property Galeria Kaufhof portfolio that is valued at $3 billion. The portfolio consists of marquee retail locations across the United States and Germany.
The buy contains flagship department stores in Beverly Hills, California; the greater New York area; as well as Berlin, Cologne, Dusseldorf and Frankfurt, Germany. It also contains properties in other metropolitan and suburban centers. Galeria Kaufhof is the leading department store chain in Germany and Belgium.
The properties generate annual cash rents of $274 million. This gives the portfolio a value of about $4.8 billion based on a blended cap rate of 5.75 percent.
HBS Global Properties is a real estate joint venture between Hudson’s Bay Co. and Simon Property Group. Lee Neibart, CEO of HBS Global Properties, will oversee the newly acquired portfolio, with support from Hudson’s Bay Co. and Simon.
“With the close of the acquisition, HBS Global Properties is taking an important step forward in its next chapter of growth,” says Richard Baker, chairman of HBS. “This joint venture will benefit from a strong foundation of HBC properties, now including GALERIA Kaufhof, whose tremendous value has been recognized by our best-in-class partner.”
David Simon, chairman and CEO of Simon, says the transaction holds several advantages. “In HBC, we have found a unique partner with a proven track record of creating value from retail properties, as well as a strong portfolio of banners that serve as attractive tenants for a range of retail opportunities. As the acquisition demonstrates, we continue to leverage our combined expertise to significantly expand and diversify the joint venture assets and increase its value for the benefit of investors.”
The portfolio seller was Metro Group. HBS Global Properties targets attractive, credit tenant, net-leased and multi-tenanted retail buildings in the United States and Europe. It is also exploring international opportunities. The entity is structured to facilitate an IPO or other monetization of the joint venture at a future date.