Morgan Stanley to buy 50% of King of Prussia Mall

by Natalie Kostelni

"Lend Lease has decided to unload its 50 percent interest in the King of Prussia Mall for $545 million. The Australian investment company said it entered into an agreement to sell its portion of the property to Morgan Stanley Prime Property Fund (NYSE:MS). Lend Lease will reap $545 million in proceeds after debt and take $100 million in profits after taxes and other transaction costs, according to the company.

The suburban Philadelphia shopping mecca totals 2.85 million square feet. It opened in 1963 as an open mall and over the years evolved into the largest enclosed mall on the East Coast.

Lend Lease bought its 50 percent interest in 1996 for $110 million. It made the investment under the name Yarmouth Lend Lease KOP Inc. A cluster of other investors that went under the name Kingmark Associates ­— which included original developer Kravco Co., Simon Property Group and three family trusts own the remaining 50 percent.

Lend Lease will use the proceeds to pay debt and fund its investment pipeline in the United States, the company said in a statement. The deal is expected to close in August."