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Prime Retail Inc. sale stalled

September 13, 2000

Prime Retail Inc. sale stalled



By ANDREW SCHOTZ / Staff Writer


Prime Retail Inc.'s proposed sale of 70 percent of Prime Outlets at Hagerstown was called off after $110 million in financing was delayed, according to the company.

Prime Retail was counting on two loans from Lehman Brothers, a global investment bank, to "repay existing indebtedness and for general corporate purposes, including the funding of programs to attract and retain tenants through increased marketing and capital improvements," a Prime Retail press release said.

Baltimore-based Prime Retail, the largest owner and developer of outlet centers in the world, expected the loans to be secured by Sept. 30, but that date has been pushed back.

As a result, Estein & Associates USA, Ltd. has canceled its offer to buy a 70 percent stake in the Hagerstown outlet center. Prime Retail would have retained the other 30 percent.

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Shoppers would not have noticed a difference because Prime Retail would have continued to manage the center, spokesman Steven A. Sless said Tuesday.

A call to Estein & Associates' Orlando, Fla., office on Tuesday was not returned.

The proposed sale of Prime Outlets at Hagerstown was announced in August 1999 as part of a package deal.

Estein & Associates planned to spend $274 million for stakes in the Hagerstown property and outlet centers in Williamsburg, Va., and Birch Run, Mich. Combined, the three centers have about 1.5 million square feet of gross leasable area, according to the company.

Sless said the sales of the Virginia and Michigan centers went through.

The Hagerstown transaction was to have been completed by Aug. 31. "Estein and Associates has terminated the contract because the closing did not occur by the specified closing date," a Prime Retail press release stated.

Sless said that Prime Retail would consider a similar sale involving Prime Outlets at Hagerstown, but none is planned.

The outlet center now has 485,263 square feet, he said.

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