Caruso eyes Galleria

Developer says he'd like to buy that mall and others, then improve them.

By Zain Shauk

April 27, 2010

Americana at Brand developer Rick Caruso on Tuesday said he would be
interested in using a new joint $750-million investment fund to buy the
rival Glendale Galleria.

Caruso, a billionaire who also developed the Grove in Los Angeles, announced
the joint venture with global investment firm TPG Capital on Tuesday, saying
it would be tapped to buy and transform distressed properties into retail
and mixed-use destinations.

Although Caruso plans to spread his new investments along the West Coast, he
said he was specifically interested in adding to his 475,000 square feet of
commercial and retail property in Glendale and to his other developments in
the Los Angeles region.

Caruso planned to direct the new fund's investments around major population
centers throughout the West Coast, including Los Angeles, Northern
California, Seattle, and San Diego and Orange counties, he said.

The Glendale Galleria, a 1.5-million-square-foot mall and office tower
adjacent to the Americana, could be a possibility, Caruso said.

"I think that there would be some very interesting synergies with owning the
Galleria along with the Americana," he said. "It certainly needs help."

The Galleria is owned and operated by Chicago-based General Growth
Properties Inc., which filed Chapter 11 bankruptcy protection last year and
is formulating a restructuring plan in court.

Real estate experts and city officials say the Galleria needs structural
improvements to stay competitive because other malls in the region, like
Westfield properties in the San Fernando Valley and Los Angeles, have made
substantial upgrades.

A spokesman for General Growth said the company was not familiar with Caruso's
interest and said the Galleria was not for sale.

"Glendale Galleria is a great property and one we're very proud of," David
Keating, a spokesman for General Growth, said in a statement.

The Galleria has 250 stores, including a three-story Target, a Macy's,
Nordstrom and J.C. Penney.

A fifth major tenant space, formerly occupied by Mervyn's, has been vacant
for more than a year.

Caruso said his firm would provide the investment needed to improve the mall's
infrastructure and make it more attractive.

"I think the mall, I think everybody would agree that it needs to be
upgraded, remodeled," Caruso said of the Galleria.

"I know the initial plans for Glendale for General Growth was to do that . .. That'sa very tired mall. I would love to see, whether it's us or somebody else,
improve it."

ZAIN SHAUK covers business and politics. He may be reached at (818)
637-3238 or by e-mail at [email protected]