Unibail-Rodamco-Westfield (URW) has sold an outdoor lifestyle destination known as The Village in the San Fernando Valley region of Los Angeles to the Kroenke Organization in a transaction valued at $325M.
URW, the largest mall operator in Europe, has been diving itself of US mall and shopping centers this year as part of a campaign to reduce the company’s debt that so far has yielded deleveraged proceeds from the sale of US assets topping $1.1B.
The Village is a Class A, 600K SF shopping center located next to the Promenade development that URW recently sold for $150M. URW remains the owner of the adjacent 1.5M SF Westfield Topanga.
URW said the sale price for The Village reflects an initial yield of 5.6% on the in-place Net Operating Income, and a 10.6% discount to the last unaffected appraisal.
In a statement that noted the company’s largest divestitures this year—including the sale of Westfield Santa Anita for $578M and the sale of the Palisade residential tower for $238M—Fabrice Mouchel, URW’s CRO, confirmed that the Amsterdam-based company remains committed to “radically reduce” Its US holdings.
“This transaction is another step in the streamlining of our US regional asset portfolio as part of our wider plan to radically reduce our financial exposure to the US. [It] demonstrates the continued investor interest in high quality assets with strong operating performance,” Mouchel said.
While it slices the US debt from its bottom line, URW has given several indications that it will continue to make investments redeveloping flagship properties in the US, including projects to convert venerable indoor malls into mixed-use communities.
Earlier this month, URW unveiled another big-ticket redevelopment for one of its US malls, a $100M project that will transform the Old Orchard mall in Skokie, IL into a “live/work/play” mixed-use community.
URW is following the same playbook on the North Shore that it is using to renovate the 63-year-old Garden State Plaza in Paramus, NJ, adding residential units to the NJ landmark. URW calls its redevelopment of the Old Orchard mall a “landmark transformation,” the same phrase it used to describe the ongoing renovation of the Garden State Plaza.
The project in Skokie, to be completed by 2026, envisions converting one of the North Shore’s leading malls into the center of a thriving live/work/play community, including a new residential development, entertainment and dining options, green spaces with walkways, and Mall retail that is re-tenanted with new retail brands that appeal to generational shifts in market demographics.
Old Orchard will be adding health and wellness tenants to the mix of mall retail outlets and will expand luxury retail with the second US store for Bloomies, Bloomingdale’s new curated shopping concept.
Unibail’s $100M commitment to the redevelopment came after Skokie’s Village Board voted to designate Old Orchard as an Illinois Business District, triggering economic development incentives for the project.
URW agreed to comply with Skokie’s recently enacted environmental sustainability plan. The company has committed to using sustainable building strategies in the renovation incorporating renewable energy, natural materials, “biophillic” design and biodiversity.