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Providence Place fetches $522 million

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The Rouse Company Announces Contract to Purchase Providence Place

P R E S S R E L E A S E

COLUMBIA, Md., Feb 3, 2004 (BUSINESS WIRE) -- Officials at The Rouse Company (NYSE:RSE) announced today that the Company has executed a purchase contract for Providence Place, a 1.3 million square foot regional shopping center in downtown Providence, RI. The seller will be Providence Place Group Limited Partnership and the contract price is $522 million (including assumed financing). The purchase, which is subject to the satisfaction of various conditions, including the successful completion of due diligence, should be completed in early March 2004.

Providence Place, which opened in 1999, is the centerpiece of a downtown revitalization plan that has significantly enhanced the city's urban environment. In addition to Providence Place, a new roadway network, the relocation of the convergence of three rivers and the lowering of AMTRAK rail lines have all combined to spur the development of new hotels, office buildings and a renovated rail station. Providence Place is the premier retail center in the market area, which includes more than one million residents within a 15-mile radius.

Providence Place includes:

  • 420,000 square feet of mall stores including five restaurants - (98% occupied);

  • 115,000 square feet of larger, street-facing shops;

  • A 200,000 square foot Filene's department store;

  • A 197,000 square foot Nordstrom department store;

  • A 126,000 square foot Lord & Taylor department store;

  • A 16-screen cinema plus an IMAX theater; and

  • A 4,500 car parking deck.

"The Rouse Company has a long history of operating large scale urban projects," said Anthony W. Deering, Chairman and CEO of the Company. "We are excited by the prospect of owning and managing a high quality property like Providence Place, and are particularly enthusiastic about the opportunity to participate in the future growth of such a vibrant community."

Headquartered in Columbia, Md., The Rouse Company was founded in 1939 and became a public company in 1956. A premier real estate development and management company, The Rouse Company, through its numerous affiliates, operates more than 150 properties encompassing retail, office, research and development and industrial space in 22 states. Among properties owned and developed by The Rouse Company is the widely acclaimed Faneuil Hall Marketplace in Boston, Mass. The Company is also the developer of the planned communities of Columbia, Md., and Summerlin, along the western edge of Las Vegas, Nev., and a new project in Houston, Tex. The Company is also an investor in The Woodlands, a planned community in Houston, Tex.

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Commercial properties in new england are selling for record breaking prices. 1 Lincoln St. in boston just sold for $671 per sqft, or over $700 million.

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Commercial properties in new england are selling for record breaking prices. 1 Lincoln St. in boston just sold for $671 per sqft, or over $700 million.

Wow. I knew East Coast real estate was expensive, but I had no idea it was that expensive!!!

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This purchase by Rouse is really a good sign of the business community's faith in the city. Rouse owns some very high profile property and lately has been paring down some of it's holdings, getting out of markets it doesn't want to be in and selling off smaller properties. Establishing a new presence on Providence is a good sign from them. They've said they will review if any improvements can be made in Providence Place, but it is 98% occupied and they don't forsee needing to change much. What they want is a presence in the city and perhaps to develop some new opportunities. It'll be interesting to see what some of their plans for the city are.

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Providence Place to lose two stores. No word yet on what will replace Lord & Taylor.

Eddie Bauer to close 23 stores nationwide

BY PAUL GRIMALDI Journal Sraff Writer | January 5, 2005

PROVIDENCE -- The traditional post-Christmas shakeout among the nation's retailers continued this week as another chain announced it will close stores.

Spiegel Group, the bankrupt mail-order company, said that it would close 23 Eddie Bauer outlets around the country by Jan. 31, including its Providence Place mall outlet. About 40 people work at the Providence store.

Eddie Bauer will shutter 23 stores, leaving it with 418, including outlets in the Garden City Shopping Center in Cranston and Wrentham Village Premium Outlets.

The development follows last week's announcement that teen clothing purveyor Wet Seal Inc., of Foothill Ranch, Calif., would close about 150 stores and lay off nearly one-third of its work force of 6,656.

Meanwhile, a spokeswoman for May Department Stores Co. said yesterday that it had completed the sale of two previously closed Lord & Taylor stores to General Growth Properties Inc. St. Louis-based May now has completed arrangements for the sale of 25 of the 32 Lord & Taylor stores it had targeted for closure.

Talks are expected to conclude on the remaining stores within 30 days. Among the seven remaining Lord & Taylor stores to be closed is the company's outlet in Providence Place mall.

The two companies, and other retail chains, are responding to the uneven holiday shopping season that just ended.

A report released yesterday by the International Council of Shopping Centers, in Washington, D.C., shows that consumers continued to shop in the week after Christmas, helping the chains patch up spotty seasonal sales. Chain store sales rose by 0.2 percent for the week ending on New Year's Day, according to the ICSC. The retail industry group will release its full seasonal report tomorrow.

"Consumers continued to spend during the post-Christmas period and the performance over the last two weeks was a pleasant surprise to an uncertain and uneven season," said Michael Niemira, the ICSC's chief economist.

Once its tally is complete, the ICSC expects December retail sales will finish 3 percent to 3.5 percent above December 2003.

While the stores in the nation's shopping districts struggled, Internet shopping sites boomed, with surveys showing sales increased from 19 percent to 29 percent. According to retail analyst comScore Networks, consumers spent $2.45 billion online from Dec. 13 to Dec. 19 and another $1.22 billion online in the week leading up to Christmas Day. In all, online revenues were $15.5 billion for the season, according to comScore.

Consumers also spent about $17 billion on gift cards, according to the National Retail Federation. But that money won't figure directly into holiday sales reports because the revenue can't be booked until the cards are redeemed.

Michael Baker, a retail analyst who publishes the quarterly Specialty Retail Research newsletter, noted in his December release that there were half a dozen major retail chain bankruptcies last year. He predicts the same number of bankruptcies this year.

"While store-opening plans are likely to be more muted, some retailers -- particularly those already in trouble -- will be forced to take a more aggressive approach to closings," he said.

The Spiegel Group, of Downers Grove, Ill., has been looking for a buyer for its Eddie Bauer clothing and home furnishing business since at least last April -- after German billionaire Michael Otto was unable to reach a deal to retain control of the company.

The Spiegel Group filed for Chapter 11 protection in March 2003. The company has been reorganizing its Eddie Bauer operation since then, including layoffs at its Seattle, Wash., headquarters.

In November, Spiegel gained permission from a U.S. Bankruptcy Court judge in New York to open up to 15 other Eddie Bauer stores this year.

Wet Seal operates 463 stores, including outlets at the Crossing in Smithfield and Emerald Square mall. Wet Seal also operates 96 Arden B. outlets, with a Providence Place mall store among them. Wet Seal did not disclose which outlets it would close.

From The Providence Journal

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This doesn't surprise me one bit. L&T has been a declining store for years, and I always thought it was a particularly bad fit for PP. Eddie Bauer has been an "out" brand as well, being too associated with the pseudo-outdoorsy types...

My question, however, is what store can replace L&T? Especially if PP wants to keep it's slightly upscale aspirations, who is left? Macys? Maybe if Marshall Fields wants to expand Eastward? I would think Sears and JC Penny (which I hate...) would not be good fits either.

PP is quite remarkable when you think that, in reality, they have about 6 or so anchor stores (defined as stores that usually anchor other malls or strip plazas): L&T, Nordstrom, Filenes, Borders, Crate and Barrel, and Bed Bath and Beyond.

- Garris

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I would actually really like them to have a Sears go into the L&T spot, but I don't know how likely that is. It's a pain to have to go out to the RI Mall for that. I also think Downtown Providence needs a Marshall's or TJMaxx, but I don't know how likely that is either. It would actually be nice to get Marshall's ot TJMaxx someplace Downcity, but foot traffic will have to increase a lot to make it attractive to them, and that may still be quite a ways off. H&M would be good for the Lord & Taylor spot as well, and is something that is at least a little more likely.

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Sears would be a particularly poor fit for Providence Place. Word on the street has Bloomingdale's taking the L&T space late this year. There is also reasonable speculation that Apple will be taking the Eddie Bauer space, as they have been waiting for a prime location on the first floor for about a year now.

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There is also reasonable speculation that Apple will be taking the Eddie Bauer space, as they have been waiting for a prime location on the first floor for about a year now.

<{POST_SNAPBACK}>

REALLY!?!?!?!

I have not wanted to make my wish out loud for an Apple store in Providence for fear that it might not come true if I did. But you say they've been waiting for space?! My boyfriend will not be happy, he becomes quite fearful when I sit down with my MacWorld magazine every month and delight to all the programs and peripherals that I want to buy. To think that I might be able to just run downtown and scoop them all up. :o (...wait, they make you pay for all that stuff don't they? Damn!)

Sears is really just a wish of mine, it's annoying that there's no place right in the city to go for things like cheap tube sox and underwear, I usually end up getting ripped off at Filene's for these things. Bloomingdale's wouldn't be bad, at least it would give an option to price compare with Filene's. The competition might make Filene's a bit better, the service in there blows.

The L&T spot is a bit weird though, it doesn't have a good presense inside the mall being at the end of a hallway that goes nowhere but there, and it only has two floors where Filene's and Nordstrom's get 3. Of course the weird down the hall location may not be a problem since Bloomingdale's name will be able to draw people down there, and it will probably help the tenants in those halls (if there are any, I've never gone down the L&T hallways).

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I was in the mall over the weekend, Zoink's toystore has also closed, I'm not surpised by that, I've heard from people in the industry that they don't pay their bills. Also the Athlete's Foot on the 2nd floor near Filene's is closing.

Plenty of spaces opening up for The Apple Store. :D

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I completely agree with you. Additionally for those who walk a lot; sears would be wonderful because downtown has no-where to get nick-knacks for the house or even fairly priced underware for that matter. Granted sears is not a visual good fit for the type of other stores the mall has ( with a few odd ball exactions of course )

A Mac store however would fit flawlessly and I think would draw a TON of foot traffic. L&T spot is far from in the path of the malls foot traffic to the dergree you may not notice its in the mall at all. The store needs to draw people in becasue of the name alone. L&T is never busy and I am not suprised they are "moving" out.

Also another store has moved out on the 3rd floor ( Aeropostale maybe?) and Xccessoreez closed on floor 2.

-Mike

REALLY!?!?!?!

I have not wanted to make my wish out loud for an Apple store in Providence for fear that it might not come true if I did. But you say they've been waiting for space?! My boyfriend will not be happy, he becomes quite fearful when I sit down with my MacWorld magazine every month and delight to all the programs and peripherals that I want to buy. To think that I might be able to just run downtown and scoop them all up.  :o    (...wait, they make you pay for all that stuff don't they? Damn!)

Sears is really just a wish of mine, it's annoying that there's no place right in the city to go for things like cheap tube sox and underwear, I usually end up getting ripped off at Filene's for these things. Bloomingdale's wouldn't be bad, at least it would give an option to price compare with Filene's. The competition might make Filene's a bit better, the service in there blows.

The L&T spot is a bit weird though, it doesn't have a good presense inside the mall being at the end of a hallway that goes nowhere but there, and it only has two floors where Filene's and Nordstrom's get 3. Of course the weird down the hall location may not be a problem since Bloomingdale's name will be able to draw people down there, and it will probably help the tenants in those halls (if there are any, I've never gone down the L&T hallways).

<{POST_SNAPBACK}>

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Welcome Mike!

I wonder if Rouse is cleaning house a little. Eddie Bauer, L&T, and Zoinks are explainable losses. Eddie Bauer is filing for bankruptcy, L&T is completely reorganizing itself, and Zoinks has a reputation, I'm not sure but they may be completely gone.

Athletes Foot probably suffers from the giant Foot Locker upstairs, but there should be enough demand to keep both of them going.

Rouse could be quietly forcing some places out in favour of a few stores that they feel Providence Place is missing.

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I really like Zoinks at Faneuil Hall Marketplace in Boston. I hope they aren't closing that store, too.

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Has there ever been a single sale in the Bang & Olufsen store? One? Ever? Just curious..

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Has there ever been a single sale in the Bang & Olufsen store? One? Ever? Just curious..

<{POST_SNAPBACK}>

:lol: Probably not. If they're happy sitting there making no sales, maybe they could move to Westminster Street. It'll at least give people down there something to look at.

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The is a sure problem with Westminster it has very little consumer foottraffic only yough who tend to walk stright on pass.

However those new 99 apts inside the old loops concert building wont hurt. I think Westminster will have a ton to offer but its not ready yet. I myself think in a few years it could be a groovy place to live though far as I can tell they are rent only spaces.

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They really need to tear down the Auditorium and open up Cathedral Square so Westminster can become a through street again. Automobile traffic will add life to the area, which will make it less desolate feeling, and will encourage foot traffic to venture in. Hotel Providence and the Peerless apartments are going to boost the foot traffic a good deal. They need retailers that can weather the build up period and they need destination retailers to draw people in. Trader Joe's would actually be an excellent draw. Even people with readily accessible grocery stores, will make a special trip for the offerings at Trader Joe's.

Let's start a letter writing campaign to get them to come. :)

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Do you guys (general term so I hope no ladies take offense) ever wonder if forums on this site are ever mined for ideas? It just seems so convenient. Just bringing it up. Sorry for breaking the flow.

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Do you guys (general term so I hope no ladies take offense) ever wonder if forums on this site are ever mined for ideas?  It just seems so convenient.  Just bringing it up.  Sorry for breaking the flow.

<{POST_SNAPBACK}>

Maybe we should be raising the bar a bit in our hopes/specualtions. :)

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Perhaps we could just get totally ridiculous and see if any of it materializes. Personally, I would like to see the next building over thirty floors have a giant beam of light shoot straight up from the top or a building in the shape of a giant hand reaching out of the earth. Hell, even if somebody pulled a watered-down version of something like that I would still think it was awesome.

:w00t:

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Perhaps we could just get totally ridiculous and see if any of it materializes.  Personally, I would like to see the next building over thirty floors have a giant beam of light shoot straight up from the top or a building in the shape of a giant hand reaching out of the earth.  Hell, even if somebody pulled a watered-down version of something like that I would still think it was awesome.

:w00t:

<{POST_SNAPBACK}>

Hilarious...

The Westminster idea to open to auto traffic should be the #1 initiative downtown right now.. Its a wasted gem..

As far as a grocery store going downtown.. I don't think that will ever happen.. There are tons of them in the surrounding neighborhoods, and with Whole Foods in Mt Hope and Shaws in Eagle Square minutes away, and with a very small resident population in Downcity, it doesn't make good business sense to put on there.. So, downtown residents will have to continue to sustain life strictly on a steady diet of Taquitos bought @ 7-11...

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And now they have another 711 on Wayboss.

However don't forget about peapod. I never travel inorder to get grocery items.

Whats this all you are saying about Westminster closed to auto traffic? Cars drive down it all day long unless you are talking about another Westminster?

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So, downtown residents will have to continue to sustain life strictly on a steady diet of Taquitos bought @ 7-11...

<{POST_SNAPBACK}>

:rofl:

I don't think we'll see a Shaw's Downcity, I agree, even if you include the Jewelry District population there is not the population base to support it. But New York has many small scale grocers like that also do a good business in prepared foods. Something small scale like that could do well. It would attract the lunch crowd to it's prepared foods (I miss New York salad makers at lunch) and also the college students in dorms. And would provide a grocery need for residents. Residents would likely make weekly or bi-weekly trips to Shaw's or Whole Foods for essentials, but day to day groceries could be provided by a small store Downcity. Office workers may even pick up items on their way home so they don't have to stop at a suburban hell grocery store on the way.

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Whats this all you are saying about Westminster closed to auto traffic? Cars drive down it all day long unless you are talking about another Westminster?

<{POST_SNAPBACK}>

It's closed through Cathedral Square. If it were open through there it would be a good crosstown route and get more traffic. The city keeps talking about opening it, but I haven't heard anything about it in a while.

Where's the 7-11 on Weybosset? Over by J&W? I haven't been over there in a while. It's amazing how narrow my travels through the city are, I need to get out more. :blush:

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