CBL & Associates Properties Inc. and Teachers’ Retirement System of The State of Illinois have agreed to form a 50/50 joint venture partnership to acquire a portfolio of retail and office buildings in North Carolina.

The properties include Friendly Center and The Shops at Friendly Center in Greensboro, six office buildings situated adjacent to Friendly Center in Green Valley Office Park, and Renaissance Center in Durham, N.C.

The portfolio will be acquired from the Starmount Co., a private real estate owner, operator and developer. CBL said it expects to close on the majority of the transaction today with the closing of Renaissance Center occurring by the end of the year.

The joint venture will assume approximately $81.6 million of non-recourse, long-term fixed debt at a weighted average interest rate of 5.77 percent, secured by Phase One of The Shops at Friendly Center and The Renaissance Center.

CBL will also acquire from The Starmount Co., a 100 percent interest in a portfolio of eight community centers located in Greensboro and High Point, N.C., and 12 office buildings located in Greensboro and Raleigh, N.C., and Newport News, Va.

The transactions are valued at an aggregate $540.8 million, including the $356.6 million joint venture with TRS. CBL will acquire their interest at a weighted average cap rate of 7.1 percent, based on income in-place at acquisition.

CBL estimates that the transaction will generate approximately 3 cents per share of funds from operations for the first 12 months of operation following the transaction close.

The Friendly Center is a 1-million-square-foot lifestyle center that was 94 percent occupied at the time of the announcement. The center is anchored by Belk, Macy’s, Sears, a 16-screen Grande Cinema, Barnes & Noble and Old Navy.

The Shops at Friendly Center is a 253,000 square foot open-air associated center that is situated adjacent to The Friendly Center. The Shops was 88.9 percent occupied at the time of the announcement and is anchored by an upscale Harris Teeter supermarket and REI.

The 62,500-square-foot Phase II of The Shops at Friendly Center is currently under construction with a grand opening scheduled for summer 2008.

The Friendly Center and The Shops at Friendly Center are situated on 123 acres in an affluent suburb of northwest Greensboro near Holden Road, Westridge Road, Bryan Boulevard, and West Friendly Avenue and are connected to I-40 by West Wendover Avenue.

Renaissance Center is a 355,000-square-foot power center anchored by REI, World Market and Linens N’ Things. It is situated adjacent to The Streets at Southpoint on 21 acres of land off I-40 in a primary retail hub of Durham, N.C.

The Renaissance Center was 89 percent occupied at the time of the announcement.

The joint venture office portfolio includes six Class-A office buildings in Green Valley Office Park, which is adjacent to The Friendly Center. The tenants include most of the area’s major bank branches and several net leased credit-tenants.

CBL develops and owns malls and shopping centers in 27 states totaling 80.1 million square feet, which includes 1.8 million square feet of non-owned shopping centers managed for third parties.

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