Macerich has sold Paradise Valley Mall, a 1.2 million-square-foot shopping center in Phoenix, for $126,500,000 to a joint venture of RED Development and an affiliate, according to the commercial real estate tracking website Vizzda. The deal comes with $89,578,260 in new debt with Western Alliance Bank, according to Vizzda.

The property recently received rezoning approval from the city and the previous partnership of Macerich and RED were moving forward with redevelopment plans to transform the asset into a 6.5 million-square-foot, mixed-use project combining the nearby Desert Ridge Marketplace and Kierland Commons.

Now, the company has sold 95 percent interest in the project, generating $95 million in net proceeds for the company. Macerich will retain a 5 percent interest in the multi-phased project.

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The completed development is slated to include retail, office, nearly 2,500 multifamily units, self storage, grocery and restaurants. The majority of the current asset will be closed once construction begins but the Costco, JC Penney, Phoenix Public Library and nearby mass transit station will remain operational.

Although both companied declined to comment further on the deal, a representative for RED pointed to a prepared statement in which Managing Partner Mike Ebert said that the company will be announcing additional details of the redevelopment in the coming weeks and that RED is proud to have the collaboration with Macerich come to fruition.

Paradise Valley Mall was constructed in 1978 and expanded in 1990. Macerich purchased the asset from Westcor back in 2002 as part of an eight-property portfolio for $1.5 billion. Phase I of the redevelopment will focus on a 347-unit multifamily community, a five-level parking structure and 53,000 square feet of restaurant and retail space. A ground breaking is slated for fall of this year.