Columbia-based developer lands $1.5 billion investment

12/19/2013 9:47 PM

12/19/2013 9:49 PM

Edens, a Columbia-based firm that develops East Coast shopping centers, landed a $1.5 billion investment Thursday that will help it grow to $7 billion in assets, the commercial real estate company said.

The equity deal was hailed as one of the largest of its kind in South Carolina and the nation, marking another step in the homegrown firm’s emergence as a major player on the national scene.

The privately held company – with 150 Columbia employees and offices in the newest high-rise on Main Street, Main & Gervais – will use the money to expand its portfolio of shopping centers from New York City to Miami. Edens also will open a second office in New York in the next couple of years, chief executive officer Terry Brown said.

“Most of this capital will go to our big East Coast markets,” Brown said, adding, eventually, the investment could allow the company to expand to markets in other parts of the country.

As part of the deal, Blackstone, a major international investment company based in New York, invested $1 billion in Edens. J.P. Morgan Asset Management and the New York State Teachers’ Retirement System also invested $250 million each in Edens.

Nearly half of the money – about $718 million – is being used to buy out the State of Michigan Retirement System’s minority ownership stake in Edens. That retirement system has been invested in Edens for 16 years, seeing it grow from a company with $275 million in assets in 1997 to a $4 billion company today, Brown said.

“That was an unprecedented transaction at that point in time. This (new) one will have that same, almost tsunami, effect,” said Mary Winter Teaster, senior managing director for CBRE|Columbia, another major commercial real estate firm.

Teaster said the equity investment likely is the largest deal of its kind in South Carolina and one of the largest nationwide. “It’s such a great thing that they are headquartered here in Columbia,” she said. “They have brought so much positive attention to this area.”

In the Midlands, Edens has built the Whole Foods-anchored Cross Hill Market on Fort Jackson Boulevard and completed major redevelopments at Trenholm Plaza in Forest Acres and Target-anchored Shoppes at Woodhill on Garners Ferry Road in recent years. Those developments helped create a third retail corridor in the Columbia market – beyond the Harbison and Northeast Richland areas – that has become an entry point to the Midlands for major retailers.

But most of Edens’ properties are in major cities along the East Coast, including Boston, New York, Atlanta, Miami and Washington, D.C.

“They have an impact on the local community, but they really reverberate with what they do throughout the Eastern seaboard,” Teaster said of Edens.

The remaining $750 million from the equity investment closed Thursday will be used primarily for acquisitions and redevelopments in those major cities, as well as some new development, Brown said. The company does not have any other major projects planned in the Columbia market at this time, he said.

Edens will continue to focus mainly on redevelopment, Brown said, an emphasis that has worked for the company in recent years as the trend toward in-town living has become popular.

“People are moving close in to cities,” Brown said, adding it makes more sense to refurbish already existing shopping centers that to build new ones.

Thursday’s $1.5 billion investment puts Edens “in the realm of some of the major players in the market,” said Brian Barker, senior portfolio manager for SCBT, the Columbia-based banking company.

“That is a very significant capital commitment,” Barker said. “That only speaks to the expertise and professionalism that Edens has not only in South Carolina but up and down the East Coast.

“It’s exciting to hear that somebody local is doing such a great thing on a national stage.”

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