NORTH AMERICA – The California Public Employees Retirement System and Simon Property Group have taken joint ownership of two regional malls in the suburbs of Chicago and Los Angeles.

The properties in the joint venture are the 1.2m square foot The Shops at Mission Viejo in Mission Viejo, California, and the 2.2m square foot Woodfield Mall in Schaumburg, Illinois.

CalPERS has placed these assets into its co-investment separate account with Miller Capital Advisory, Institutional Mall Investors.

Andrew Miller, president at Miller Capital, said: "We view these two properties as being in the top 50 performing regional malls in the country.

"This is reflected by their level of sales. They have generated sales volume of $600 per square foot on an annual basis. This compares to the national average in the US of $400 per square foot."

David Simon, chairman at Simon, said: "As a result of this transaction, we have added the iconic Woodfield Mall to our portfolio. This premiere mall is located in one of the country's largest markets, and we welcome the opportunity to enhance its productivity and value through our leasing and management efforts."

The two properties are now owned 51% by Simon and 49% by CalPERS. 

The pension fund had previously owned the mall near Chicago on its own. In October of last year, CalPERS bought out the other half interest in the property held by the corporate pension fund of General Motors Corporation.

"It was always our intent to find a new partner for Woodfield," Miller said. "We had the first right of refusal to buy out our partner, which we did. There was never a thought to own the property by ourselves on a long-term basis."

Both of the regional malls are considered to be core assets, with occupancy in the mid-90% range and most of the tenants having 10-year leases.