Unibail-Rodamco-Westfield Sells Off ‘B-minus’ San Diego Mall
Unibail-Rodamco-Westfield is continuing its march away from the U.S. — opening up a new kind of life for a second-tier mall in San Diego.
The Paris- and Amsterdam-based mall giant said Friday that it sold off the two parcels that make up the Westfield Mission Valley. Unibail’s share amounted to 42 percent of the total sale price of $290 million.
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Lowe Enterprises and Real Capital Solutions bought the east side of the complex and Sunbelt Investment Holdings Inc. acquired the western portion.
“Mission Valley is a mature asset which originally opened in the early 1960s, undergoing its last significant renovation in the 1990s,” Unibail said in a statement. “It is a B-minus-rated, 1.5 million square foot property with occupancy at 71 percent.”
It’s the kind of mall that captures the changing face of retail in the U.S., where pure value players are gaining ground along with high-end stores and the so-called “A” malls. In between, traditional retail has become challenged, with e-commerce taking share and consumers looking for something more.
Tenants include a Bloomingdale’s outlet, Macy’s Home, Nordstrom Rack, Target, a 24-Hour Fitness and dining options such as Buffalo Wild Wings, Outback and Yard House.
Where Unibail looks to retreat, Lowe and Real Capital see a 1.1-million-square-foot open air opportunity across 41 acres with some 9.8 million visitors annually.
The two said they would create a “mixed-use village with refreshed retail” as well as multifamily housing units.
“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 vice president of Lowe, which is leading the project.
Joel Mayer, Lowe’s executive vice president and head of the company’s Retail reVision, added: “Customers today are seeking food and fun as a part of their shopping experience. We intend to add unique local restaurants, specialty food cafes and entertainment uses along with new retailers that offer a variety of experiences for all ages.”
Unibail said the sale price represented a 12 percent discount to the mall’s last unaffected appraisal.
So far, the mall giant has raised $1.7 billion by exiting U.S. properties, including Westfield Brandon in Florida and Westfield North County in California earlier this year, and five other properties sold last year.
The divestitures are a reflection of changing corporate priorities — and management — at the company.
Unitail-Rodamco bought the U.S.-heavy mall owner Westfield in a $25 billion deal in 2018.
But in 2020, when the company was planning a 3.5 billion-euro rights offering, a group of investors led by French billionaire Xavier Niel and former Unibail chief executive officer Léon Bressler argued the move would be “severely dilutive” and that management was “a prisoner of a failed strategy that began with the acquisition of Westfield.”
The shareholders prevailed and the company is now pivoting away from the U.S. to focus all the more on Europe.
Unibail currently operates 78 shopping centers in 12 countries, including 45 under the Westfield brand. All together the portfolio counts more than 900 million customer visits annually.
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