Dune Capital in Purchase of $1.5 Billion Xanadu Meadowlands Mall

November 23, 2006

Cleary Gottlieb represented Dune Capital in the purchase, in joint venture with Colony Real Estate Fund, of the Xanadu Meadowlands mall and entertainment destination being developed on sites adjacent to the Meadowlands Continental Arena, home of the New Jersey Devils and Nets, and Giants Stadium, home of the Giants and Jets football teams. The transaction closed on November 23.

Dune and Colony purchased the partially built Xanadu from The Mills Corporation, which has experienced financial distress over the last year, in part related to cost overruns on the massive Xanadu project. When completed in 2008, the Xanadu Meadowlands project is expected to be a 4.8 million-square-foot entertainment destination that will offer visitors a broad array of experiences, including interactive entertainment venues, fine dining, outdoor amusements, runway fashion shows and America’s first snow dome for indoor skiing. Meadowlands Xanadu will also offer a luxury hotel and class A office buildings. The project was designed by David Rockwell. Phase 1 of the project, which is currently under construction, will include a 2.7 million square foot mall and family entertainment complex. Dune and Colony will have the option to develop the subsequent phases which will include the hotels, office and expanded entertainment sites.

Xanadu was begun as a partnership between The Mills Corporation (a Public REIT) and Mack-Cali Realty Corporation, in cooperation with the New Jersey Sports and Exposition Authority. Financing for the original project came from KanAm, which is one of Germany’s leading private syndicators and asset managers of international real estate investments. Dune and Colony, as the new lead developers of Meadowlands Xanadu, will be responsible for completing the family entertainment and shopping complex. KanAm and Mills will retain a subordinated interest in Xanadu in recognition of prior investments.

The Dune Real Estate Funds make opportunistic investments in a broad range of real estate-related assets, portfolios, joint ventures and operating companies worldwide. The funds are managed by Dune Capital Management LP, an investment management firm formed by ex-Goldman Sachs bankers Daniel Neidich, Steven Mnuchin and Chip Seelig. Dune Capital Management LP has approximately $2.5 billion of capital under management and is based in New York.