Regional shopping mall slated to be sold by mid-year
SAN JOSE >> The owner of the Westfield Oakridge shopping center has struck a deal to sell the South San Jose regional mall, a deal that's part of a years-long strategy to slash the company's mall holdings in the United States.
A potential buyer has agreed to acquire the big San Jose mall, Francebased Unibail-Rodamco-Westfield, the mall's owner, stated in materials related to the company's 2023 financial report.
“Unibail-Rodamco-Westfield signed a sale, purchase and escrow agreement with a $30 million non-refundable deposit for the disposal of Westfield Oakridge,” the retail behemoth stated in an earnings report this week.
The potential buyer wasn't identified. The deal is slated to be accomplished by mid-year.
“The transaction is expected to be completed in Q2-2024,” Unibail-Rodamco-Westfield stated, which equates to the April-through-June quarter of this year.
The price also was unknown. However, what is known is that the Westfield Oakridge mall property has a property value of $307.9 million, according to information at the Santa Clara County Assessor's Office.
The potential sale of Oakridge Mall marks the second time this year that a major Bay Area shopping center has landed a buyer.
In January, a real estate group headed up by business executive Jiashu Xu, acting through an affiliate, bought Eastridge Center, paying $135 million for the east San Jose shopping mall.
Westfield Oakridge is one of the Bay Area's largest regional malls with 1.14 million square feet of retail floor area. Oakridge occupies a site bounded by Blossom Hill Road, Winfield Boulevard, Thornwood Drive and Santa Teresa Boulevard.
It's no surprise that Unibail-Rodamco-Westfield is attempting to sell Westfield Oakridge.
For years, URW has repeatedly told investors it was attempting to dramatically slash the size of its exposure to the U.S. market as a way to greatly ease its debt burdens.
Three years ago, in early 2021, Unibail-Rodamco-Westfield said it had embarked on a quest to dispose of numerous assets in the United States, including both Westfield Oakridge and Westfield Valley Fair, which also is in San Jose.
During a conference call with investors, Jean-Marie Tritant, chief executive officer of Unibail-Rodamco-Westfield, reiterated that the company was attempting to slash the size of its shopping center portfolio in the United States.
Jonathan Kownator, an analyst with investment firm Goldman Sachs, pressed Unibail-Rodamco-Westfield on whether the company might ease up on its sales efforts in the United States.
“Is there an alternative scenario where maybe you actually don't sell the U.S. business if the economy is strong?” Kownator asked.
Kownator added that the U.S. assets such as Westfield Oakridge and Westfield Valley Fair “seem to be performing really well.”
The retail titan remains committed to its course of action, Trinant replied in response to the Goldman Sachs analyst's question and assessment.
Trinant noted that Unibail-Rodamco-Westfield acquiesced to the foreclosure of its big regional mall in San Francisco and gave the keys back to the property's lender. Trinant said that drastic step was part of the retreat from the U.S. market.
This steadfastness suggests attempts are ongoing to sell Westfield Valley Fair, a San Jose mall that's even larger than Westfield Oakridge.
“We are committed to our deleveraging plan through, in particular, the radical reduction of our financial exposure to the U.S.,” Trinant said during the conference call.