URW Sells 1.5M SF San Diego Shopping Center for $290M

Unibail-Rodamco-Westfield (URW), Europe’s largest mall owner, continues to execute the strategy it adopted at the beginning of last year to unload its US malls and shopping centers as part of a campaign to reduce its debt.

This week, URW completed the sale of two parcels that make up the 1.5M SF Westfield Mission Valley shopping center in San Diego for a total of $290M.

Lowe and Real Capital Solutions (RCS) purchased the 1.1M SF eastern portion of Westfield Mission Valley, an open-air shopping center, while Sunbelt Investment Holdings acquired the western portion, an enclosed power center.

The properties, which were built in 1960, are 71% occupied.

Lowe and Real Capital Solutions said in a statement that they intend to reposition the 41-acre open-air retail center into a walkable, transit-oriented mixed-use village. Westfield Mission Valley is located at 1640 Camino del Rio N. in proximity to the San Diego Trolley’s Mission Valley Center Station.

Under Lowe’s Retail revision platform, launched in 2020, the partners plan to add multifamily units as well as refreshed retail facilities.

“We are well acquainted with this property and have long had an interest in its potential both as a thriving, ongoing retail destination and as an opportunity to bring much needed housing to this community,” said Mike McNerney, executive VP, Lowe, in a statement.

“Lowe has a deep history as an owner and developer in San Diego and we have specific insight into the Mission Valley area as the owner of the Town and Country resort where we completed a comprehensive renovation to the resort and developed the plan to add apartments to several acres at its periphery,” McNerney said.

Lowe has engaged Centennial to manage the property. Project leasing will be led by a partnership of Centennial and Retail Insite, the company said.

Sunbelt Investment Holdings, based in San Diego, owns and operates 20 neighborhood and power shopping centers encompassing 3.5M SF in SoCal and Arizona.

In February, URW sold the 1.2M SF North County Mall, located in the San Diego suburb of Escondido, to Bridge Group Investments and Steerpoint Capital for an undisclosed price.

URW will maintain its leasehold interest in the shopping center until it expires in June 2053. Previously known as Westfield North County Fair, North County Mall is located at 272 E. Via Rancho Parkway, in northern San Diego County, on an 83-acre site adjacent to Interstate 15.

Last month, URW disclosed it has stopped making payments on $558M in debt for the Westfield San Francisco Centre, the largest shopping mall in the city.

The company said the 1.2M SF mall at 865 Market Street near Union Square will transfer to receivership. The Westfield Centre, currently 55% occupied, is jointly owned by URW and Brookfield Properties, which acquired a stake through its acquisition of Forest City.

Deutsche Bank originated the loan for the mall in 2016. Midland Loan Services has been designated as the special servicer. The move came a month after an anchor tenant, Nordstrom, announced it is shutting its 300K SF store at the Westfield Centre due to safety concerns.