URW Sells Two More US Shopping Centers

Unibail-Rodamco-Westfield (URW), Europe’s largest mall owner, has sold two more US shopping centers—it’s second sale of US assets in less than a week—bringing the total from its yearlong effort to divest its US holdings to $1.3B.

On December 30, the company announced the sale of Westfield Trumball, located in Trumball, CT and Westfield South Shore in Bay Shore, NY for a combined gross sale price of $196M, which the company said represents an initial yield of 9.5% on the in-pace NOI.

URW did not disclose the buyer.

Westfield Trumbull, built in 1965 and encompassing 1.2M SF, is 85% leased, according to URW. Westfield South Shore, built in 1963 on the South Shore of Long Island, is 89% leased.

URW refinanced both assets in 2015, with the Trumball mall securing a $152M loan from Column Financial and South Shore getting $126M in financing from JP Morgan.

URW last week sold an outdoor lifestyle destination known as The Village in the San Fernando Valley region of Los Angeles to the Kroenke Organization in a transaction valued at $325M. Kroenke is the real estate arm of the owner of the Los Angeles Rams NFL franchise.

The Village is a Class A, 600K SF shopping center located next to the Promenade development that URW recently sold for $150M. URW remains the owner of the adjacent 1.5M SF Westfield Topanga.

URW said the sale price for The Village reflects an initial yield of 5.6% on the in-place Net Operating Income, and a 10.6% discount to the last unaffected appraisal.

In a statement that noted the company’s largest divestitures this year—including the sale of Westfield Santa Anita for $578M and the sale of the Palisade residential tower for $238M—Fabrice Mouchel, URW’s CRO, confirmed that the Amsterdam-based company remains committed to “radically reduce” Its US holdings.

“This transaction is another step in the streamlining of our US regional asset portfolio as part of our wider plan to radically reduce our financial exposure to the US. [It] demonstrates the continued investor interest in high quality assets with strong operating performance,” Mouchel said.

While it slices the US debt from its bottom line, URW has given several indications that it will continue to make investments redeveloping flagship properties in the US, including projects to convert venerable indoor malls into mixed-use communities.

Earlier this month, URW unveiled another big-ticket redevelopment for one its US malls, a $100M project that will transform the Old Orchard mall in Skokie, IL into a “live/work/play” mixed-use community.

URW is following the same playbook on the North Shore that it is using to renovate the 63-year-old Garden State Plaza in Paramus, NJ, adding residential units to the NJ landmark. URW calls its redevelopment of the Old Orchard mall a “landmark transformation,” the same phrase it used to describe the ongoing renovation of the Garden State Plaza.