The mall giant Simon Property Group is expanding beyond shopping centers. The REIT recently announced a new partnership with real estate investment firm Jamestown. Simon is buying a 50 percent stake in Jamestown from founding partners Christopher and Ute Kahl. The Kahls will continue to be the shareholders of Jamestown, which has over $13 billion in assets under management.
The financial terms of the partnership haven’t been disclosed, but the deal is expected to close by the end of this year. Atlanta-based Jamestown will continue to function as a separate entity, and CEO Matt Bronfman and President Michael Phillips will stay in their respective positions. Jamestown was founded in 1983 as a way for German investors to invest in American property and is known for mixed-used projects like Ghirardelli Square in San Francisco and Chelsea Market in Manhattan, which it sold to Google for $2.4 billion in 2018.
For Simon, the deal is one of the latest by the REIT since it acquired rival mall owner Taubman Centers in 2020. The partnership with Jamestown could help Simon boost its returns on mixed-used development. The acquisition also signals a shift from mall-focused investments, as mall rent growth has been weak and higher returns are elsewhere. Simon Property could certainly use the boost as, like most equities, shares in the REIT have dropped significantly recently. Shares in Simon Property were down 42 percent this year through Monday’s stock market close.