URW Sells Westfield Santa Anita Mall for $538M

ARCADIA, CA–Unibail-Rodamco-Westfield, as part of its ongoing divestiture of US mall assets, has sold the Westfield Santa Anita mall for $538M, said to be the largest retail deal since 2018.

The buyer of the 1.5-million-square-foot property in Arcadia, CA was not disclosed. The transaction, brokered by Eastdil Secured, translates into $363 per square foot. The mall is 96% leased and posted sales of $611 per square foot, with sales reaching 93% of pre-pandemic levels, the company said in a release.

URW, Europe’s largest mall operator, acquired the Santa Anita mall in 2018 as part of its $15.7B acquisition of Australia-based Westfield, which had owned and operated the mall since 2007.

Earlier this year, URW revealed it would exit the US market and sell its portfolio of US properties by the end of 2023, GlobeSt.com reported. At the beginning of 2022, the portfolio encompassed 24 malls—including some of the largest and highest-profile mall properties in the US—and five other CRE assets.

When it announced the divestiture strategy, URW valued the portfolio at $13.2 billion. The mall portfolio includes the Westfield World Trade Center in New York, Century City in Los Angeles and the Garden State Plaza in Paramus, NJ.

Since the beginning of the year, URW says it has unloaded $900M of its US holdings, including three of the 11 SoCal properties in the portfolio.

In March, the company sold the 34-acre site of a shuttered mall in Woodland Hills to Stan Kroenke, owner of the Super Bowl champion LA Rams, for $150M. This transaction was followed by the $238M sale of a 300-unit Palisade residential tower in La Jolla.

URW also has handed to lenders the keys to four of its Florida malls in foreclosure this year, including Westfield Citrus Park in Tampa and Countryside Mall.

In May, Bloomberg reported that investors who have purchased bonds backed by mortgages on URW properties were fearful the mall owner would default on more its mortgages as it unwinds its US portfolio.

That prospect appears less likely as mall owners reported strong leasing activity in their Q2 results. Simon Property Group, the nation’s largest mall owner, reported record retailer sales of $674 per square foot at its malls in Q2, a 26% increase.

The Simon REIT reported an occupancy rate of 93.9% as of June 30, stating that 40% of its Q2 leasing deals were made with new businesses that are lining up to fill mall space at its properties, GlobeSt.com reported.

The decision to sell Paris-based URW’s US malls was the result of a leadership struggle that resulted in Jean-Marie Tritant becoming CEO in January 2021. Tritant and his allies had pledged to reduce the company’s debt by selling the US assets, shifting the focus of Unibail’s investment strategy back to Europe.

In announcing the divestiture of the US portfolio, Tritant said the company believes it can hit its “deleveraging target” even if the portfolio sells at a 30% discount off 2021 valuations.