When Centennial plunked down $199 million for the Westfield Valencia Town Center mall in Santa Clarita, it had one aim: to add value by building homes, offices and more businesses.
The Dallas-based investor bought the 1 million-square-foot indoor mall at 24201 West Valencia Boulevard in Santa Clarita with a plan to redevelop the property, the Los Angeles Daily News reported. The seller was Paris-based Unibail-Rodamco-Westfield.
The 53-acre mall is in a prime spot for a multi-use development that combines luxury homes, offices and shops and restaurants, Carl Tash, senior executive vice president at Centennial, told the newspaper.
The mall now draws foot traffic mostly on weekends, Tash said. Centennial’s goal, he explained, is to attract customers throughout the week by making it a live-work-play destination.
It will take about two years, he added, before construction starts.
Centennial did not disclose the costs or its specific plans for redevelopment of the 31-year-old mall, to be renamed Valencia Town Center. Any development proposal must be approved by the city.
The company bought the mall nine months after URW defaulted on a $195 million commercial mortgage-backed securities loan tied to the shopping center. It paid $199 per square foot.
The mall, which opened in 1992 as Valencia Town Center, has more than 140 shops and restaurants, with six anchor tenants, including Macy’s, JCPenney, Forever 21, Cinemacenter Cinema, H&M and Gold’s Gym, according to its website. It was 87 percent occupied at the time of sale.
Centennial plans to expand its merchandising lineup and add “property enhancements,” it said.
Last year, Gov. Gavin Newsroom signed two bills, Senate Bill 6 and Assembly Bill 2011, which allow developers to easily convert land zoned for commercial use into housing.
Centennial joins mall owners across greater Los Angeles and the nation with plans to redevelop aging indoor shopping centers into urban retail villages.
The real estate investor, which says it has a portfolio of 22 million square feet, recently resolved its own issues on a loan tied to its MainPlace mall in Santa Ana. The firm and its partner USAA Real Estate scored an extension on a $140 million CMBS debt, according to Morningstar, after the loan was sent to special servicing earlier this year.
The firms’ struggle to hold onto the property and pay off the loan came during Centennial’s redevelopment of the 1.1 million-square-foot mall. The company initially estimated the makeover to cost $300 million — but the price jumped to $500 million.
— Dana Bartholomew