The owner of the Westfield Palm Desert says he is looking to sell the entire mall.
The move comes amid a larger planned sale by Unibail-Rodamco-Westfield Group, a European real estate company, which plans to divest most of its US assets and use the funds to pay down debt.
URW has been hit hard by the pandemic, posting an operating loss of more than $8.2 billion last year as COVID-related shopping center closures and asset write-downs hammered its business.
A spokesperson for URW noted that the sale of Westfield Palm Desert was part of this “broader strategy of rebalancing (the company’s) portfolio and disposing of certain assets”.
The mall, at Highway 111 and Monterey Avenue, opened in the early 1980s. Its current tenants include Macy’s, JC Penney, Dick’s Sporting Goods, H&M, and Barnes and Noble.
URW took control of the property in mid-2018, when Unibail-Rodamco merged with Westfield. Unibail-Rodamco’s $15.7 billion purchase of Westfield brought the company’s property count to 102 shopping centers in 13 countries. It currently lists 86 shopping centers among its holdings.
The company will transfer management of the property to a third-party receiver before the sale, according to a URW spokesperson. The mall will remain open throughout the transition period, the spokesperson said.
The company declined to provide further details regarding a potential price or sales schedule.
The company acquired a shopping center in 2018
Most of the company’s US assets by value are located in California, although URW has shopping centers and other commercial properties across the county in places such as Florida and New York.
At the time of the 2018 merger, Christophe Cuvillier, Director of Unibail-Rodamco, predicted that the operation would usher in “a new chapter in our history” and said: “With an unparalleled track-record and know-how in retail, offices, and convention and exhibition venues, the group is ideally positioned to generate superior value and develop world-class projects.
But many malls have been hit hard during the pandemic, leading to a record number of store closures in 2020, according to real estate data firm CoStar Group.
URW executives are betting that despite the nearly $1.9 billion write-down of the mall and other company assets last year, its California malls will continue to attract the right buyers.
Jean-Marie Tritant, chairman of URW’s board, said on an earnings call in February that the company is banking on the strength of the California economy and a 2021 economic rebound in the state to sell assets in a timely and lucrative manner.
“These assets … are strong and they are in their catchment areas, and they would be stronger with the rebound,” Tritant said, adding that weaker competition from other businesses affected by the pandemic would boost their attractiveness.
Mall opened in 1983 to large crowds
The mall was originally known as Palm Desert Town Center and it officially opened on November 5, 1983. On that day, some 7,000 people showed up to stroll through what had been presented as the newest “community” in the Coachella Valley.
The turnout was staggering considering that the population of Palm Desert at the time was only 14,000 people.
At the time, shopping centers were seen as a new way for municipalities to improve residents’ quality of life.
Built for $75 million by Ernest Hahn, a longtime resident of Indian Wells and head of the largest mall development company in the western United States, Palm Desert Town Center, upon completion, was valued at $140 million and had two levels, 140 shops, four department stores, seven movie theaters and an ice rink.
By 2019, its list of stores had dropped to 122, and the rink had been closed for years. Sears, one of five flagship stores, closed in early 2020, just before the pandemic forced many mall stores to close temporarily. Record Alley, another long-time tenant, also closed in 2020.
Previous reporting by Desert Sun reporters Marie McCain and Nicole Hayden was used in this report.
James B. Cutchin covers business in the Coachella Valley. Contact him at [email protected]