Northern Calif. Malls Change Hands
A trio of prominent Northern California shopping centers was sold in the past week, indicating that real estate investments are sustaining momentum despite recent upticks in interest rates.
Chicago-based real estate investment trust General Growth Properties Inc. (GGP) closed on its $312 million purchase of the Stonestown Galleria shopping center in San Francisco. The two-story, 915,000-square-foot center houses a Macy’s and Nordstrom and number of specialty chains, including Bebe and Wet Seal. It is about 92 percent occupied and has annual sales of $475 per square foot. The mall was built in 1952.
GGP Chief Executive Officer John Bucksbaum said the center has significant expansion opportunities because it sits on a parcel with more than five acres of undeveloped land. “Stonestown is a top performer in a world-class city and complements our strong California portfolio,” he said.
GGP has 179 properties, including the Glendale Galleria in Glendale, Calif., and the Galleria at Tyler in Riverside, Calif.
Two other Northern California centers, the Stoneridge Shopping Center in Pleasanton and the Hilltop Mall in Richmond, were part of a nine-mall package that Arlington, Va.–based The Mills Corp. acquired from General Motors Asset Management for more than $1 billion. Mills, known for the Ontario Mills outlet mall in the Inland Empire of Southern California and the Del Amo Fashion Center in Torrance, Calif., gains a 50 percent managing interest in the malls with other private investors.
Mills is looking for high yields and growth potential from the investment. The company plans to leverage its marketing and development expertise to maximize its returns, said Larry Siegel, chief executive officer. Mills expects initial annual returns of 6.4 percent.
The company will finance the purchase through cash and its credit lines. The total package accounts for about 10 million square feet with sales of $2.1 billion. The Stoneridge and Hilltop centers each contain about 1 million square feet and average about 400,000 square feet of leasable space.
Stoneridge is the dominant player in the Bay Area’s Tri-Valley market. It is anchored by Nordstrom, Macy’s, JCPenney and Sears and includes specialty chains such as Quiksilver.
Hilltop, based in Contra Costa County, is anchored by Macy’s, Sears and JCPenney. Like Stoneridge, it benefits from attractive demographics.
The package also includes the Columbus City Center and The Mall at Tuttle Crossing in Columbus, Ohio; the Lakeforest Mall in Gaithersburg, Md.; Marley Station in Maryland’s Anne Arundel County; the Briarwood Mall in Ann Arbor, Mich.; the Meadowood Mall in Reno, Nev.; and The Falls in Miami. —R.M.
