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Chris Jones

Group Buys Desert Passage

26 September 2003

A group fronted by East Coast developer David Edelstein and investment firm RFR Holding reached an agreement to buy the Desert Passage at Aladdin shopping center for approximately $235 million, members of the group said Thursday.

Aby Rosen, who heads New York-based RFR, said he and business partner Michael Fuchs have joined with Edelstein to purchase the center. Sales contracts with mall owner Trizec Properties have been signed, Rosen said. The deal is expected to close late this year or in early 2004.

"Our two companies have acquired the asset," Rosen said of Edelstein, RFR and Desert Passage.

Rosen added it's still too soon to discuss what changes might occur at the 475,000-square-foot, Arabian-themed mall, other than to say some changes will take place.

"We're going to reinvest in the mall, remarket it and remake it," Rosen said. "We need to change the entrance and open it up to the hotel and the street. It's a great place, but right now it's kind of hidden."

The group is buying the center for much less than the nearly $300 million Trizec paid to develop the mall, which opened in August 2000.

RFR is a German-owned investment firm that handles approximately 20 Manhattan properties, including the Seagram Building. Edelstein is a prominent New York developer.

Rosen also confirmed his group has hired Urban Retail Properties Co. to look into a potential management role at Desert Passage. The Chicago-based property management firm now oversees more than 40 million square feet of retail, office and government space throughout the United States, though none in Nevada.

The Review-Journal first reported Sept. 13 that an Edelstein-led group had emerged as the leading suitor for Desert Passage, which Trizec planned to unload to better focus on the company's core portfolio of office properties.

Robert K. Futterman & Associates, a New York-based company that has served as the exclusive retail consultant for the $1.7 billion AOL Time Warner Center near New York's Central Park, will advise the mall's new owners during the transition, Robert Futterman, the company's chief executive officer, confirmed Thursday.

Futterman's company has helped revive several Manhattan retail districts, including Times Square, and would likely assist the Edelstein/RFR group in its efforts to turn around the underperforming Desert Passage. Both Edelstein and Futterman were in Las Vegas earlier this month to visit the center. Trizec spokesman Rick Matthews said Thursday he could not comment on any new developments regarding Desert Passage's sale.

Other confirmed bidders for Desert Passage include Blackstone, a Wall Street buyout firm; Cleveland-based Forest City Enterprises, which owns or operates portions of three Las Vegas-area shopping centers; and Gordon Group Holdings, a Greenwich, Conn.-based company that co-developed the Forum Shops at Caesars.