How Much Did Ryan & Ashley Smith (aka, Smith Entertainment Group) just Pay to Acquire the 111-Acre Shops at South Town? Probably Over $300 Million.

After being purchased over a decade ago for $205 million by a real estate consortium led by Pacific Retail Capital Partners, the Sandy, Utah-based Shops at South Town have been sold by Pacific Retail to SEG, which will use the property to house the recently acquired Utah Hockey Club.

Separately, Pacific Retail announced it "... will lead SEG’s leasing efforts for The Shops at South Town, in partnership with Woodley Real Estate."

By my calculations, I believe it highly likely that the valuation of The Shops at South Town has risen by at least 50% since it was acquired by Pacific Retail in 2014.

{NOTE: The 111-acre site includes a combined total of over 1.3 million-square-feet of buildings between the formerly known South Towne Center Mall and the adjacent Marketplace, home to a Target Super Center.}

Nearly three months to the day after it announced it planned to acquire The Shops at South Town to become the future home of the Utah Hockey Club, Smith Entertainment Group has now completed that purchase.

{AUTHOR'S NOTE: Although it has virtually zero presence on the internet, Smith Entertainment Group was founded in 2020 as the apparent Ryan and Ashley Smith holding company for their ownership of, and ownership positions in, various sports and entertainment companies, properties and services, including the Utah Jazz franchise of the National Basketball Association, the Utah Hockey Club franchise of the National Hockey League, and the Real Salt Lake franchise of Major League Soccer, among others.}

According to yesterday's SEG/Utah Hockey Club announcement, the "... 111-acre site will be home to Utah Hockey Club’s permanent state-of-the-art practice and training facility ..." with buildout of the Utah Hockey Club facilities expected to be completed in 2025.

As highlighted in the aerial view shown below of the 111-acre site, it appears that the Utah Hockey Club will be based in the former location of the Macy's department store on the southern-most building of the property (as highlighted by the Utah Hockey Club logo).

Additionally, the SEG news release stated that the purchase included "... The Shops at South Town, the surrounding parking lot, and some adjacent retailers, restaurants, and hospitality buildings, within the 111-acre footprint that is contained between 1-15, 10000 South, State Street, and 10600 South."

What was not included in the SEG news release, however, was the price paid for the property nor any of the terms.

Getting to a Likely $300 Million Price Point

Interestingly, Seattle, Washington-based Pacific Retail Capital Partners put out its own news release yesterday about the sale of The Shops at South Town, an announcement which provides additional flavor and insight into this transaction.

For those not familiar with Pacific Retail, it's a "... retail operating group of large open- air and enclosed shopping centers, with more than $3.0 billion in assets under management."

And, if you did not know, Pacific Retail led a partnership of real estate investors which acquired the then named South Towne Center Mall in 2014 for $205 million, as noted in this 03 November 2014 news release.

According to Steve Plenge, Chief Executive Officer of Pacific Retail,

"By strategically repositioning The Shops at South Town and preparing it for its next phase, we've not only secured a successful exit for our investors but also laid the groundwork for a transformative project that will benefit the Sandy and greater Salt Lake City communities while supporting Utah's exciting entry into the NHL."

Although the Smith's and SEG certainly have the chops to do so (should they have chosen such a route), the Pacific Retail announcement explained that it

"... will continue to manage and lease The Shops at South Town (for SEG) to ensure continuity with the ownership transition and minimize disruption for consumers ... in partnership with Woodley Real Estate,"

(with the SEG announcement stating that Woodley had assisted it in the acquisition process).

To be clear, the Pacific Retail announcement did not disclose a sale price for The Shops at South Town either.

However, even with a softening of commercial real estate valuations since 2022, both nationally and locally, data shared by numerous media reports and sources, like Statista (see below), show significant increases in such valuations from 2014 through Q3 of 2023.

It is this combined information and data that leads me to suggest a commercial valuation increase of at least 50% for The Shops at South Town since November 2014, which (if correct) would mean a purchase price of at least $300 million for this property.

I believe this is especially true given Pacific Retail's continued participation on both leasing and managing the balance of the real estate portfolio of this site.

So ... am I right? Or wrong?

Clearly, without additional info from one or more of the parties, it's impossible to know.

But for now, you at least have my opinion on this matter: $300MM+.

Thoughts?

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