(Bloomberg) – Another Starwood Capital Group mall has a new owner as Barry Sternlicht’s company continues to reduce its retail real estate holdings.
Centennial, a Dallas-based redevelopment company, has acquired the Westland Mall outside of Miami as part of a deal that includes taking over Starwood’s approximately $ 149 million mortgage. The property, in Hialeah, is Florida’s sixth-largest enclosed mall, with nearly 100 retailers and restaurants, including Macy’s, JCPenney, H&M and Victoria’s Secret stores, Centennial said in a statement.
Starwood has shut down shopping malls, often at a loss, since the Covid-19 pandemic forced many businesses to close and prompted consumers to increase their online shopping. Its retail unit lists seven malls on its website, up from 30 before the pandemic. Other mall owners, including Brookfield Asset Management and Simon Property Group, have also sold properties to lenders as prospects for profitability fade.
Centennial, whose financial partners include USAA, plans to spend around $ 1 billion over the next 24 to 36 months to acquire and redevelop malls by adding apartments, hotels and offices, said Whitney Livingston, director. of operation. The company oversees 21 shopping centers in nine states with nearly 14 million square feet (1.3 million square meters) of space.
“Our investment thesis is that the best real estate in major markets is where the malls are today,” she said in an email. “We don’t buy just to be a mall operator. We buy-to-own real estate that’s right on the mark that we can redevelop into dominant mixed-use destinations. ”
Representatives of Starwood and Centennial declined to disclose the full financial terms of the deal. Centennial is assuming the remaining portion of an initial $ 160 million mortgage that Starwood took on the property in 2017 from Aareal Capital Corp, according to Miami-Dade County real estate records. The county’s real estate appraiser says the mall’s market value in 2021 is $ 81.9 million.