Chelsea buys Vegas outlet mall for $104 million

Fri, Aug 1, 2003 (2:06 a.m.)

The concerns about the Las Vegas Premium Outlets mall competing with Belz Factory Outlet World mall appear to be moot.

Friday afternoon, Roseland, N.J.-based Chelsea Property Group said it bought the 477,000-square-foot Belz Factory Outlet World for $104 million from entities affiliated with privately held Estein & Associates USA Ltd.

The price included the assumption of a $24.4 million, 8.12 percent mortgage due 2012, and implied a capitalization rate of approximately 10 percent.

Belz Factory Outlet World in Las Vegas opened in 1993 with an initial phase of 255,000 square feet of gross leasable area, and was expanded to its current size in 1996.

The center is 99 percent leased to approximately 130 tenants, including Bass, Bose, Casual Corner, L'eggs Hanes Bali, Jones New York, Lenox, Liz Claiborne, Mikasa, Nautica, Nike, Reebok, Tommy Hilfiger and Vans.

"It is widely considered one of the top outlet properties in the country, with 2002 sales averaging $390 per square foot and occupancy costs averaging less than 7 percent of sales," Chelsea said in a statement.

David Bloom, chairman and chief executive of Chelsea, said, "Belz Factory Outlet World and Las Vegas Premium Outlets -- 'bookends' at the south and north ends of The Strip -- are the two most centrally located outlet properties in Las Vegas. We believe they will cater to largely separate and distinct audiences, and that owning both centers will enable us to optimize the tenant mix at each. Las Vegas continues to be among the country's most exciting markets and we are very pleased to be establishing our presence with two strongly positioned properties that should dominate their respective market segments."

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