Pacific Telesis Group, San Francisco, has become the second largest institutional shareholder in Taubman Realty Group, a public REIT, by trading its 75% stake in a Michigan mall for 6.1 million shares of Taubman stock.
Taubman was co-owner in Fairlane Town Center with the $14.6 billion pension fund.
PacTel officials and the pension fund's real estate adviser, Yarmouth Group, were unavailable for comment. According to Keith Pomeroy of SNL Securities, a financial information firm, PacTel's equity interest in the mall was valued at $65.6 million. Taubman also assumed mortgage debt of about $26 million, which was PacTel's portion of a $34.6 million mortgage on the mall.
``This (deal) reflects an innovative approach on the part of PacTel to securitize its real estate holdings and provide itself with an alternative exit strategy,'' said Bill Chadwick, president of Chadwick, Saylor, a real estate investment bank.
The General Motors pension fund is Taubman's largest institutional shareholder, according to Barbara Baker, head of investor relations at Taubman.