ROSEMONT, Ill., June 30 /PRNewswire-FirstCall/ -- Horizon Group Properties, Inc. ("HGPI") (Pink Sheets: HGPI), an owner, operator and developer of factory outlet centers and land developer, announced that it has reached agreement to sell six outlet shopping centers. The agreement provides for consideration of approximately $62 million net of the existing debt secured by the properties subject to the transaction. The transaction is scheduled to close July 11, 2006 with an extension until as late as August 1, 2006 under certain circumstances. The transaction is subject to customary closing conditions which, if not satisfied, could result in the transaction not closing. HGPI and the buyer had previously been involved in litigation related to the transaction which the parties settled through mediation.
The centers subject to the agreement are located in Darien, GA, Laughlin, NV, Medford, MN, Traverse City, MI, Tulare, CA and Warrenton, MO. They contain a total of 1.3 million square feet of gross leasable area and are owned by partnerships of which Horizon Group Properties, L.P. ("HGP LP") owns approximately 51%. HGPI owns approximately 69% of HGP LP and is its general partner. HGPI's interest in El Portal Center, LLC, which owns a center in Laredo, TX that is planned for redevelopment, is not included in the sale nor is its recently acquired site in El Paso County, TX. HGPI will also continue to own the outlet shopping centers in Gretna, NE, Holland, MI and Monroe, MI.
The closing on the outlet center in Darien, GA occurred in December 2005 but was subject to an agreement that, at the buyer's option, obligated HGPI to repurchase the center. The repurchase agreement currently expires at the earlier of date the buyer closes on the other properties subject to the agreement or August 1, 2006. For accounting purposes, HGPI will not record the sale of the Darien center until the expiration of the repurchase agreement.
Gary J. Skoien, Chairman, President and Chief Executive Officer of HGPI commented, "We are pleased to have reached agreement on this transaction. We believe the sale price for these properties reflects the success of our efforts to increase their value through aggressive leasing, marketing and capital expenditure programs. The proceeds will allow the Company to continue to pursue opportunities in the retail industry, including the development of Sun Valley Factory Shoppes in El Paso, Texas and the redevelopment of the El Portal shopping center in Laredo, Texas.
Based in Rosemont, Illinois, Horizon Group Properties, Inc. owns, develops and operates primarily factory outlet shopping centers and is the developer of a master planned community in suburban Chicago.
Safe Harbor Statement: The statements contained herein, which are not historical facts, are forward-looking statements based upon economic forecasts, budgets, and other factors which, by their nature, involve known risks, uncertainties and other factors which may cause the actual results, performance or achievements of Horizon Group Properties, Inc. to be materially different from any future results implied by such statements. In particular, among the factors that could cause actual results to differ materially are the following: business conditions and the general economy, competitive factors, interest rates and other risks inherent in the real estate business.
