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Shopping Centers Today -> August 2003
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REITS BUY TWO TOP CALIF. MALLS
BY IAN RITTER
Two major California shopping centers — Del Amo Fashion Center, Torrance, and Stanford Shopping Center, Palo Alto — changed hands last month.
The Mills Corp. bought the 2.5 million-square-foot Del Amo for $442 million, while Simon Property Group agreed to buy Stanford, at 1.3 million square feet, for $333 million, in a deal that Simon expects to close this month.
Del Amo, built in 1975 and located in the Los Angeles metropolitan area’s South Bay market, is the fourth-largest mall in the United States. The center, which Mills says has sales per square foot of about $400, is anchored by J.C. Penney, Macy’s, Macy’s Home and Furniture Gallery, Robinsons-May and Sears. The seller is The Torrance Co.
“Del Amo is particularly attractive because of the leasing opportunities it provides,” said James A. Napoli, president of Mills’ operating division, in a press release. “Leading retailers and entertainment concepts have expressed tremendous interest in coming to Del Amo.”
Mills plans a $160 million redevelopment of the center, involving the renovation of 670,000 square feet of existing space and the construction of an additional 100,000 square feet.
The company financed the purchase through equity and debt, including a $316 million mortgage, and says it may also take on an equity partner.
This marks the latest of several mall acquisitions in what has been a busy year for Mills. The Arlington, Va.-based company has bought stakes in a total of eight centers since February and recently opened its first overseas project, outside Madrid. The company broke ground on two retail-entertainment centers in June, one in the Pittsburgh area and the other near Toronto. It now owns 24 centers in all.
Meanwhile, Simon is buying Stanford Shopping Center from Stanford University, though the university will continue to hold the ground lease under the super-regional open-air center. Stanford Shopping Center, whose sales exceed $600 per square foot, is considered one of the top centers in the United States. Its anchors are Bloomingdale’s, Macy’s, Macy’s Men’s Store, Neiman Marcus and Nordstrom.
“Stanford Shopping Center is the premier super-regional shopping center in the San Francisco Bay area and one of the top regional malls in the United States,” said Simon CEO David Simon in a news release. “This asset is a perfect fit in our strategy to own and manage high-quality, high-productive retail real estate. It strengthens our presence in the West.”
Indianapolis-based Simon is the largest mall owner in the United States, with 238 centers nationwide. Stanford Shopping Center will be the company’s seventh in California. The 46-year-old center underwent a $40 million expansion in December 2001 and went on the market in May.
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