Westfield sells Mission Valley shopping centers for $290 million – The San Diego Union-Tribune
Paris-based Unibail-Rodamco-Westfield has sold its two Mission Valley shopping centers, totaling 1.5 million square feet of space, to separate buyers for a combined $290 million, the company announced Friday.
Los Angeles-based developer Lowe and real estate investor Real Capital Solutions acquired the larger, 41-acre Westfield Mission Valley East mall just east of Mission Center Road at 1640 Camino del Rio North. The mall, which was built in 1960, features a mix of retailers and restaurants, including Target, Nordstrom Rack and Yard House. The center is also home to the AMC Mission Valley 20 movie theater.
Lowe, which also owns the Town and Country resort in Mission Valley, said that it will take the lead on remaking the mall into a mixed-use property with housing. The makeover of the longstanding hotel complex included removing nearly 300 hotel rooms to make way for hundreds of apartment units. Lowe several years ago sold off about 10 acres of the resort property to Vancouver, Wash.-based Holland Partner Group, which built the housing.
“This is one of our ideal targets, because of the location and the very dynamic Mission Valley area. And we’re familiar with Mission Valley because we redeveloped the Town and Country hotel,” Lowe executive Joel Mayer, who runs the firm’s retail division, told the Union-Tribune. “It’s a little early to tell exactly what we’re going to do, but we hope to be able to do a meaningful amount of residential.”
Sunbelt Investment Holdings Inc. purchased the 19.8-acre Westfield Mission Valley West center, anchored by Trader Joe’s and Old Navy, across the street at 1072 Camino del Rio North. The privately held real estate company, which has an office in San Diego, focuses on shopping centers and operates a number of strip malls in the region, including the Plaza Del Rio center just north of the Mission Valley mall. The company paid $125.15 million for Mission Valley West, property records show.
First opened in 1963, the Mission Valley West center — bounded by Camino De La Reina, Mission Center Road, Camino Del Rio North and Camino Del Arroyo — was overhauled in the late 1990s. The property also extends to the Chevrolet car dealership at the southwest corner of the site.
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Both Mission Valley shopping centers were purchased, at least in part, for their development potential.
Mayer spoke of remaking the single-use Mission Valley East mall into a mixed-use, live-work-play environment with improved public spaces and plazas. And the transaction comes just days after Westfield secured a land-use change that allows for additional density, including housing, at the Mission Valley West property where ample surface parking seemingly presents an opportunity for change.
“It’s a no-brainer to add housing and it is probably the most obvious solution for these Mission Valley properties. Mission Valley is the 100-percent location as it is so central and connected to our region. However, these retail establishments have suffered for years,” said Nathan Moeder, who is a real estate analyst with London Moeder Advisors and has researched land values in the neighborhood. “Adding housing to both East and West represents an opportunity to transform (them) into a larger community and create continuity. … It will feel more urban and exciting than just retail with asphalt parking.”
Occupancy across both Mission Valley properties was at 71 percent at the time of the sale, Unibail-Rodamco-Westfield said.
Unibail-Rodamco purchased Westfield in 2018, forming what’s now known as Unibail-Rodamco-Westfield. The company has, since 2021, been selling off its U.S. assets. In late December, the company sold The Village outdoor shopping center in Woodland Hills for $325 million to the Kroenke Organization. And, in February, the firm sold the leasehold for its Escondido mall, now called North County Mall, to Steerpoint Capital and Bridge Group Investments for $57 million.
In total, the firm has pocketed $1.7 billion from the sale of its U.S. entities, the company said in its press release.
Unibail-Rodamco-Westfield continues to own Westfield UTC in University City, and has signaled an intent to add something new in place of the old Nordstrom store and adjacent structures that were demolished last year.
At the same time, Seritage Growth Properties, which owns the eastern parcel where Sears used to be, is likely shopping for a buyer for its holdings, known as The Collection at UTC. In October, Seritage shareholders approved a dissolution plan that includes selling off all assets.
Westfield Plaza Bonita is also rumored to be for sale, said Joshua Ohl, who is the local director of market analytics for CoStar.
Updates
11:02 a.m. July 24, 2023: This story was updated with the sales price for Mission Valley West and notes that Seritage Growth Properties intends to sell all of its assets.
4:38 p.m. July 21, 2023: This story was updated with additional information.
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