UPDATE: General Growth Under Contract To Buy St. Louis Trophy Mall

General Growth Properties Inc. (GGP) said Tuesday it is under contract to buy Plaza Frontenac, a 500,000-square-foot luxury mall in St. Louis.

The property, built in 1974, had been put on the block by Perlmutter Investment Co.'s Davis Street Land Co. and Verizon Communications Inc.'s (VZ) pension fund.

General Growth's chief executive, Sandeep Mathrani, said during the company's earnings call that it plans to form a joint venture with an institutional investor who will own a 45% stake in the mall.

"This transaction is consistent with our philosophy to own the best malls in the market," Mathrani said. He didn't specify the pricing details, but disclosed the company sold a 26% stake in its Galleria mall in St. Louis and used the proceeds to buy Plaza Frontenac.

The mall is only one of nine in the country that is anchored by both Saks Fifth Avenue and Neiman Marcus department stores. The property had been on the market since May and generates tenant sales of $500 a square foot, according to Dave Doupe, a broker with Jones Lang LaSalle who represented the sellers. He noted that is slighlty below the sales volumes generated before the recession.

General Growth, the nation's second-largest mall owner behind Simon Property Group Inc. (SPG), owns and has a management interest in 166 malls in 43 states.

The company's portfolio totals 169 million square feet of space.

-By A.D. Pruitt, Dow Jones Newswires; 212-416-2197; angela.pruitt@dowjones.com

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