Glimcher Realty Trust, Columbus, Ohio, entered into a development agreement and preferred stock transaction with Nomura Asset Capital Corp., New York, for the Great Mall of the Great Plains in Olathe, Kan.
Based on a pact between the two firms, the $135 million securities purchase agreement will be used to finance additional value-oriented regional mall developments.
Nomura completed an initial purchase of 34,000 shares of preferred stock from Glimcher Realty Trust at a cost of about $34 million. Proceeds from the offering have been invested in the Great Mall development. In exchange, Glimcher will receive a preferred return, after which profits will be split among the participants in accordance with their share of project ownership.
Both Glimcher and Nomura have a 45% share in the venture. The remaining 10% is held by a minority partner.
In addition, Nomura has made a forward commitment to provide permanent financing to replace the current construction loan once the project is finalized. Glimcher will provide leasing, management and construction services.
Total development costs for the megamall and entertainment complex are about $110 million.
Herb Glimcher, chairman of Glimcher, said the Nomura deal is unusual in that it offers Glimcher debt and equity capital from one source.
The Great Mall will be in the Kansas City metropolitan area. It will include 10 major anchor stores, more than 165 specialty and value-oriented retailers, catalog outlets, manufacturer's factory outlets, a 16-screen movie theater complex, theme restaurants and a food court.