Simon Property Group, the nation's largest mall landlord, is acquiring a 50% stake in developer Jamestown as it looks to expand and wring new revenue from its portfolio by diversifying its shopping centers.

The Indianapolis-based real estate investment trust is among a number of U.S. retail property owners adding new types of tenants such as hospitality, office, multifamily and coworking firms to unused space at their malls in large surface parking lots, vacant anchor stores and other sites. The additions aim to help revitalize and increase foot traffic at existing stores as brick-and-mortar retailers compete with online shopping, which has accelerated in the pandemic.

Simon said on Tuesday its strategic deal with Jamestown, a global firm headquartered in Atlanta, will enable it to accelerate its "future densification projects."

Jamestown, which describes itself as a design-focused real estate investment and management company, has been involved in landmark projects such as Chelsea Market in New York City; Industry City in Brooklyn, New York; Ponce City Market in Atlanta, where it has its headquarters; Ghirardelli Square in San Francisco; and the Innovation and Design Building in Boston.

Upon closing, Simon plans to acquire a 50% interest in Jamestown from founding partners Christoph and Ute Kahl, who will continue to be Jamestown shareholders. Simon and Jamestown didn't disclose further terms of their deal, which is expected to close before the end of the year.

Jamestown began in 1983 in Atlanta and in Cologne, Germany, home to co-founder and Chairman Christoph Kahl. Once the deal is complete, Jamestown plans to operate independently and continue to be led by CEO Matt Bronfman and President Michael Phillips, who will retain their existing ownership. Christoph is set to transition from day-to-day involvement as the company's chairman to a member of the new Jamestown board.

"The partnership will unlock new value-creation opportunities and create a platform for future growth in the investment management sector," Simon and Jamestown said in a joint statement. "With Simon, Jamestown will gain a partner with a deep platform of resources and operational tools that will enhance the firm's ability to scale and grow. With Jamestown, Simon will gain an opportunity to capitalize on the growing asset and investment management businesses with an experienced fund manager and mixed-use operator and developer."

Simon's pending transaction with Jamestown will fortify the mall owner's foothold in Atlanta’s ritzy Buckhead shopping district, where it already owns the Phipps Plaza and Lenox Square malls.

Jamestown’s Buckhead Village District is one of the city’s highest-end retail centers and at times competed directly with Simon for tenants.

A redevelopment and densification at Phipps Plaza was already undertaken by Simon, involving the completed or in-process addition of a Nobu hotel and restaurant, a 340,000-square-foot office building, a Life Time fitness facility as well as one of its coworking sites, Life Time Work.

And Simon's strategic partnership in Jamestown will help in those kinds of endeavors, according to analysts and company officials.

"The deal helps Simon diversify away from its traditional focus on shopping centers," Neil Saunders, a managing director of GlobalData, said in an email to CoStar News. "This is sensible from both a financial and market perspective as the center of gravity has shifted away from old-style malls to more mixed-use-style schemes which integrate residential and space for innovative businesses. Jamestown has expertise in creating destinations and this expertise will be valuable to Simon, including as it tries to reinvent some of its own properties."

Since its founding, Jamestown has invested in and managed real estate on behalf of nearly 80,000 entities. It has created and overseen more than 30 funds that own or have owned landmark properties such as One Times Square, site of New York City's New Year's Eve ball drop, and Chelsea Market, the mixed-use project on Manhattan's West Side that it sold in 2018 to Google for $2.4 billion.

David Simon, president and chairman of Simon, in the statement pointed to "Jamestown's combination of sector expertise, dedication to driving creative placemaking and reputation in the fund management business."

Jamestown initially invested in trophy towers and at one time owned 1211 Avenue of the Americas in New York. All told, it has executed transactions totaling $40 billion.

The firm has started the transformation of Chelsea Market into a community hub where office tenants mingle with shoppers, diners and tourists in the food hall and retail corridor.

Jamestown followed a similar playbook in 2011 in its hometown when Jamestown acquired a former 2.1 million-square-foot Sears warehouse and distribution center in midtown Atlanta and converted it into Ponce City Market, one of Atlanta’s liveliest live-work-play developments.

"At Jamestown, our goal is to be the best mixed-use investor globally, focusing on creating innovation hubs and community centers," Michael Phillips, the company's president, said in the statement.

He added that "the partnership with Simon will help us achieve that goal and position us for our next chapter as we scale our differentiated products in an increasingly global world."

Goldman Sachs is serving as exclusive financial adviser to Jamestown, and King & Spalding and CMS Germany are serving as legal counsel. Wells Fargo is serving as exclusive financial adviser to Simon and Latham.

Tony Wilbert of CoStar News contributed to this story.