Simon Converting Brea Mall into Urban-Retail Village

Simon Property Group has unveiled the experiential mall of the near-future in Los Angeles, an Urban-Retail Village with 380 apartment units, outdoor shops and restaurants that will replace a former Sears complex at Brea Mall.

Urban-Retail Village is a rapidly emerging post-pandemic model for the redevelopment of malls into experiential communities, where people can stroll out of their apartments into a neighborhood filled with outdoor shops, restaurants and, of course, a fitness center so the local foot traffic is brisk.

According to plans the mall REIT submitted to the city late last year—which were approved by the Brea Planning Commission in December—Simon is planning this kind of transformation at the Brea Mall, the Los Angeles Daily News reported.

The plans call for the redevelopment of nearly 16 acres of the 74-acre mall, a vacant 162K wing formerly occupied by a Sears department store and a Sears Auto Center, which is a separate building in a 7.5-acre parking lot.

The vacant Sears outlets, which have been empty for years will be demolished to make way for the Urban-Retail Village, which also will include upgrades to State College Boulevard between Imperial Highway and Brea Mall South.

Brea Mall opened in 1977 anchored by with May Co. and Sears. The Orange County mall featured an ice skating rink in the 1980s that was later converted into a food court. The mall currently is anchored by Nordstrom and generates an estimated $700M in sales, according to the REIT’s latest earnings statement.

In a Q4 earnings call this week, CEO David Simon—who said he was speaking from Phipps Plaza, a property the REIT recently “transformed” with a new office building, a new Nobu Hotel and a Life Time Resort—reported another record year for Simon Property Group.

“Retailer sales momentum continued. We reached another record in the fourth quarter at $753 per square foot with the malls and outlets combined, an increase of 6% year over year,” Simon said.

Simon reported occupancy for malls and outlets at the end of Q4 was 94.9%, an increase of 150 basis points compared to the prior year and an increase of 40 basis points over Q3. Renewals occupancy was 98.2%, and TRG was 94.5%. Average base minimum rent was $55.13 per foot, an increase of 2.3% year over year.

In 2022, the REIT signed 4,100 leases encompassing more than 14M SF. Over the past two years, Simon has signed 8,000 leases for more than 29M SF.

“We have a significant number of leases in our pipeline that will open for a late 2023 and 2024 openings,” the Simon CEO said.

“We completed 14 redevelopments in 2022, and we will complete another major redevelopment project this year at some of our most productive properties,” Simon said. “In addition, we expect to begin construction this year on six to eight mixed-use projects. All of this will be funded with our internally generated cash flow.”