URW Secures $925M Loan for Westfield Century City

Unibail-Rodamco-Westfield (URW) has secured a $925M loan for the 1.4M SF Westfield Century City shopping center in Los Angeles.

Morgan Stanley is providing a two-year, floating rate CMBS loan in a deal slated to close before end of the month, providing new financing for the outdoor mall, which is located at 10250 Santa Monica Boulevard.

According to a statement from URW, the loan has an option for three one-year extensions with a spread of 280.7 bps over SOFR. The mall, which is 100% owned by URW, is 95.4% leased.  The statement said Westwood Century City was appraised at a value of $1.94B in May by Newmark Valuation & Advisory.

“This new financing for Westfield Century City increases optionality for URW with respect to the asset, and reinforces the [URW] Group’s liquidity,” said Fabrice Mouchel, URW’s chief financial officer, in a statement.

“As stated at our H1 2023 results, the radical reduction of URW’s U.S. financial exposure remains the path forward. The strong business performance across all markets, our low cost of debt, our ample liquidity position, our tight capital expense control and our net debt-to-EBITDA ratio all provide us with flexibility on the timing of this process,” Mouchel said.

Early last year, URW began an effort to sell its US mall assets, resulting in the sale of several properties, generating $1.7B in deleveraging proceeds.

Last month, 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.

In June, Unibail-Rodamco-Westfield (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.

The move came a month after an anchor tenant, Nordstrom, announced it was shutting its 300K SF store at the Westfield mall, and a week after the two largest hotels in Union Square also stopped making debt payments.

“Given the challenging operating conditions in downtown San Francisco, which have led to declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process to transfer management of the shopping center to our lender to allow them to appoint a receiver to operate the property going forward,” said Molly Morse, a spokesperson for URW, in a statement.

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.