The former general manager of Westfield Capital mall said that the mall’s eventual sale to a new owner should bring a round of fresh investment to the property, including new tenants and renovations, both for the surrounding landscape and buildings.
“You don’t buy a mall that size to let it sit and appreciate; you put something into it,” said Jim Boyde, who managed the mall from 1999 to 2005.
Boyde, now retired, began managing the mall a year after Westfield bought it, he said.
Westfield Group, the world’s biggest shopping-center operator by assets, on Monday announced it would sell seven malls in the U.S. — including Olympia’s Capital mall — for $1.6 billion to an affiliate of Starwood Capital Group, as the Australian company consolidates its U.S. portfolio to fund higher-return activities.
Westfield is divesting malls to redeploy capital into planned development projects, the Sydney-based company said in a statement to the Australian stock exchange. It will retain a 10 percent interest in the shopping centers, which will be managed by Starwood, it said.
Boyde called that an added bonus, saying the malls not only would benefit from fresh dollars from Starwood, but also from Westfield’s continuing interest.
Westfield invested plenty into the mall, including a new movie theater and food court, as well as the outdoor mall area known as The Promenade.
The company also worked hard to fill the former Mervyn’s space, finally bringing REI, Forever 21, and Total Wine & More to the site.
Westfield, founded by billionaire Frank Lowy, is getting rid of properties in the U.S. with lower productivity and fewer redevelopment opportunities to reinvest in higher-return assets and projects. It divested seven U.S. malls in April 2012 to Starwood for $1 billion and sold half stakes in six Florida malls to O’Connor Capital Partners for about $700 million in March, while maintaining management rights.
Westfield will own and operate 40 malls in the U.S. after the sale, and average annual specialty sales at its malls will increase by 3.8 percent to $513 per square foot after the disposal, it said.
The company has started work on the retail part of the World Trade Center in New York, in which it invested $612.5 million in a joint venture with the Port Authority of New York and New Jersey in July 2011. It is also undertaking $240 million of redevelopments in New Jersey and Maryland, it said in August.
The malls Westfield is selling are three properties in Ohio, two in California, one in Indiana and the Olympia mall, it said. The deal is in line with the assets’ book value as of June 30, and $120 million below their Dec. 31 value, the company said.
Kayla Waldron, Westfield Capital mall’s marketing manager, did not return a call for comment.Rolf Boone: 360-754-5403 email@example.com Bloomberg News contributed to this report.