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Unibail-Rodamco-Westfield sold Westfield Santa Anita in Arcadia for $538 million, or $363 per square foot.
The sale of the mall — to an undisclosed commercial real estate investor that owns other retail properties in Southern California — represents the largest retail acquisition in the U.S. in the past four years, according to Eastdeal Secured, which advised URW on the deal.
The 1.48 million square foot property, which is 96% leased, posted sales of $611 per square foot. Unibail Rodamco Westfield had owned the mall since 2007 before buying the Australian company for $25 billion in 2018.
“This transaction bodes well for the shopping center industry as a whole,” said Chris Hoffman, managing director of Eastdeal Secured. “We see an ever-expanding demand for high-quality, irreplaceable malls.”
According to Eastdeal Secured, this transaction represents the largest amount paid for a single shopping center in the US since 2018, as a 100% or partial interest sale.
The sale continues Unibail-Rodamco-Westfield’s mission to divest its assets in the U.S. In March, the company sold the 34-acre shuttered Westfield site in Woodland Hills to Los Angeles Rams owner Stan Kroenke for $150 million. Kroenke is expected to turn the property into a training facility for his Super Bowl champions.
URW sold the 300-unit residential tower at UTC Westfield in La Jolla for $238 million.
In Florida, URW unloaded four malls in foreclosure.
URW still owns Westfield Century City, Westfield Culver City, Westfield Topanga and The Village at Warner Center, as well as Westfield Fashion Square in Sherman Oaks and Westfield Valencia Town Center in Santa Clarita.
Retail returns
Jimmy Slusher, of CBRE Group Inc. First Vice President of National Retail Partners – West Group, it’s no surprise how well the Westfield Santa Anita sold. Last December, Slusher and his team closed on the sale of GH in Granada Hills for $69.8 million.
“Now is a good time for retail,” Slusher said. “The need for capital investment, historically low cost of capital or good financing with great confidence in retail has created a favorable environment for good results for both buyer and seller during the successful recovery from the pandemic. seller”
“From a macro perspective, there was a lot of negativity in retail ahead of Vivid,” said Brian Leigh, managing director at Jones Lang LaSalle Inc. Retail was too much. Covid has driven many weak retail businesses out of business.
Until recently, interest rates were so low that the contagion came out of retail, prompting investors to buy.
“We’ve survived when our governments shut down our assets and put them out of business,” Slusher said. “Many tenants have found creative ways to continue their businesses.”
Slusher says that retail has come out of the cave it entered during Covid.
“Retail has a big vote of confidence right now,” Slusher said. “Retail has weathered the storm and is proving to be much stronger than anyone expected.”
Target, for example, invested in online shopping before the pandemic hit, with customers choosing to shop online at Target stores. At the time of the pandemic, the company was well positioned in e-commerce.
“Yes, everyone has bought things online, but now we’re seeing customers enjoy the shopping experience,” Slusher said. All this has received a big vote of confidence from an investor’s point of view.
“All investors are looking for the next opportunity,” Ley said. “Retail is a good risk-adjusted return.”
“The market is hungry for grocery-owned tenants,” Leigh continued. “What seems important is bringing in more on-demand tenant properties. That density and foot traffic is important to that property. This increases the lifespan and relevance of that mall.
Retail also has higher returns than industrial or apartments, Leigh says.
“With these properties, your initial yield is higher,” Leigh said.
Next steps
Richard Rizica of El Segundo Beta Agency sees URW’s sale of Westfield Santa Anita as a predictable move to reduce its U.S. presence.
“Retail is becoming more and more a local business,” Rizika said. “People should be forced to go to malls. It’s easy to do when you’re local. It’s hard to do when you’re abroad.”
Rizika said he wouldn’t be surprised if the new owner of Arcadia Mall renovated the site. Westfield points to Westfield’s success in revitalizing the Century City.
“That property has tremendous potential for further development in that community,” Rizika said of Westfield Santa Anita.
Leigh added, “It’s a strong performing mall with some long-term benefits for other uses over time if you plan to convert from retail.
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