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Ben Carter

Carter’s stake in Town Center sells for $375M

By Karen Brune Mathis, Managing Editor

Developer Ben Carter sold his ownership stake in the Jacksonville retail landmark St. Johns Town Center last week to a Deutsche Bank real estate investment group for what insiders say is more than $375 million.

Those real estate sources, who are familiar with the price but did not want to be identified, said Carter sold his 50 percent ownership for more than half of the reported $750 million value of the center.

Carter, who is based in Atlanta, declined Thursday to provide the price. The sale closed May 30.

He developed the Southside shopping center with Simon Property Group Inc. It occupies more than 200 acres at the Interstate 295 East Beltway and Gate Parkway.

The center transformed Jacksonville’s retail landscape with exclusive stores such as Tiffany & Co. and Apple. Nordstrom, another long-sought retailer, will open in October.

Simon continues to own its stake and manages the center.

“I’m delighted that this worked out well for my long-term partner, Simon, the new partner and Ben Carter Enterprises,” Carter said in a statement through spokesman Tony Wilbert, president of The Wilbert Group in Atlanta.

A spokesman for Indianapolis-based Simon Property Group said he had no comment.

Deutsche Asset & Wealth Management’s real estate investment group bought Carter’s 50 percent. Deutsche Bank declined comment.

Carter said in March he was working with Eastdil Secured, a New York investment bank, to examine the value of the center to see what his half-ownership would be worth.

He said the St. Johns Town Center is what the industry refers to as a trophy asset.

The center opened nine years ago and expects to open its newest wing, anchored by Nordstrom, Oct. 10.

Carter said Simon Property Group is the world’s largest owner of retail properties.

“The opportunity for people to partner with Simon Property Group is a very unique investment strategy for institutional investors. We are trying to see what sort of value or partnership interest there might be and if it’s a value that we feel is commensurate with the quality of the asset, we might consider selling it,” he said in March.

At the time, Carter did not say what that value might be and declined to comment on reports that the center might be valued at $750 million. The Real Estate Alert newsletter reported that bids for Carter’s 50 percent stake in the Town Center “are expected to value the property at up to $750 million, amid intense demand for high-quality retail properties.”

St. Johns Town Center is a 1.2 million-square-foot retail and restaurant center developed as an open-air lifestyle center. Adjacent properties include apartments and condos that trade off the St. Johns Town Center vibe.

In addition to residences, more retail developed adjacent to the center, such as The Markets at Town Center, where the off-price Nordstrom Rack opened in November. It’s not far from the full-line Nordstrom under construction.

A decade ago, Carter’s Atlanta-based Ben Carter Properties in partnership with Simon transformed the undeveloped acreage into the region’s major shopping draw.

St. Johns Town Center opened March 18, 2005, and added a second phase that opened Oct. 26, 2007. The Nordstrom wing is Phase III.

The Town Center has 11 anchor stores and more than 150 specialty stores and restaurants. The center also features Target and other stores that sell more mass-market goods.

Simon Property Group, which continues to manage the center, also owns other area malls. In addition to its 50 percent interest in St. Johns Town Center, Simon Property has a 25 percent interest in The Avenues mall and owns the St. Augustine Premium Outlets.

Last month, Simon Property completed the spinoff of some its properties, including the Orange Park Mall, into a separate company called Washington Prime Group Inc. Those properties include the Westland Park Plaza in Orange Park, which is 32 percent owned by Simon.

Carter now is active in new developments as Ben Carter Enterprises. He said he sold Ben Carter Properties to his partners in 2012.

“I’m actually not sure that regional malls or town centers are in great demand in the Southeast, which is my territory,” he said in March.

Wilbert said Carter is spending his time in Savannah, where he has acquired 27 buildings in the historic downtown to revitalize Broughton Street for retail development. Wilbert said Carter has contracted for 11 more buildings.

Another of Ben Carter Enterprises’ new developments is the Outlet Mall of Georgia, projected to open in spring 2015 with more than 560,000 square feet of stores and restaurants at I-95 and Pooler Parkway.

He is working with Steve Tanger, president and CEO of Tanger Factory Outlet Centers, to develop the center, now referred to as Tanger Savannah.

Carter said he is working on another fashion outlet in Augusta, Ga., and his new company wants to develop urban retail mixed-use as well.

Carter’s sale of his stake in the town center brings another investor to Jacksonville’s real estate market.

Deutsche Asset & Wealth Management is considered one of the world’s leading investment organizations, with $1.28 trillion of assets under management as of year-end 2013.

The dws-investments.com says Deutsche Asset & Wealth Management offers individuals and institutions traditional and alternative investments across all major asset classes. Deutsche Bank is its parent company.

Deutsche Asset & Wealth Management’s real estate investment business has been investing in real estate assets for more than 40 years. It has more than 450 employees around the world and $47 billion in assets under management as of year-end 2013. For more information visit rreef.com.

In March, Deutsche Asset & Wealth Management’s real estate investment business announced that it had acquired 350 and 450 East Las Olas Blvd. in Fort Lauderdale on behalf of one of its clients.

The Las Olas Centre, underscores Deutsche Asset & Wealth Management’s investment focus, which reflects well on St. Johns Town Center.

Deutsche Asset & Wealth Management said the project “is one of very few options for trophy quality Class A office space in a desirable location due to walking distance to shopping, restaurant and entertainment precincts, as well as proximity to airports, highways and executive housing.”

The company said it considered Las Olas Centre the premier office asset in the market.

kmathis@baileypub.com

@MathisKb

(904) 356-2466

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