French mall giant Unibail-Rodamco-Westfield has signaled to a debt ratings company that it may stay invested in some of its U.S. malls in what would be a show of confidence for the nation's retail property as it secures a major refinancing of its shopping center in Los Angeles.
URW is wrapping up the completion of a $925 million cash-out refinancing of the 1.4 million-square-foot Westfield Century City at 10250 Santa Monica Blvd., according to a Fitch Ratings report. The transaction is expected to close on Aug. 29. The outdoor mall is popular among celebrity product launches including those for Kim Kardashian and John Legend, and hosts numerous events annually, including this year's Los Angeles Chargers NFL draft party.
The deal comes after URW said it planned to sell all its malls in the United States and focus on its European portfolio. However, URW signaled it may change its mind, particularly as it relates to Westfield Century City, according to the report, which didn't disclose what other U.S. malls URW intended to remain invested in. As of July 21, URW had generated $1.7 billion in U.S. deleveraging proceeds, according to a statement.
"While URW has sold off some of its U.S. regional mall holdings over the past two years, recent conversations with management representatives, during the site visit, indicated that the company intends to maintain a presence in the U.S. with a focus on its 12 'flagship' malls, of which Westfield Century City is considered the 'crown jewel,'" according to the report.
URW has invested in the Westfield Century City mall since it bought the property in 2002, including injecting $1 billion into the shopping center in 2017. The mall, a destination for tourists and Angelenos alike, features Nordstrom, Equinox, Macy's, a three-level Bloomingdale's and the West Coast's first Eataly food concept. The mall has four outdoor event venues, a luxury private concierge and VIP suites with dedicated access to private views.
URW owns and operates malls across Europe and America. A URW representative didn't respond to an emailed request to comment from CoStar News.
Westfield Century City's net cash flow in 2022 was $100.4 million, and the mall's tenants reported roughly $1 billion in sales at year-end 2022, according to the report. The year-end 2022 sales were higher than 2019's $964 million in sales. Bloomingdale's alone reported $112.2 million in trailing 12-month sales as of March 2023.
Beyond the sales figures, Westfield Century City attracts well-heeled patrons from some of the wealthiest enclaves on L.A.'s Westside, including Century City, Beverly Hills and West Hollywood, said Gabe Kadosh, vice president of Colliers who specializes in retail and isn't involved in the mall's refinancing. In July, Legend rolled out his skincare brand at Westfield Century City at an event that was also attended by his celebrity wife, Chrissy Teigen.
"It's drastically different than a traditional indoor mall and even many outdoor malls," Kadosh said of Westfield Century City.
The mall is roughly 95.4% leased to more than 220 tenants, according to the report. That's roughly the same as The Grove, a nearby competing, but smaller, luxury mall owned by billionaire Rick Caruso, which has an occupancy of roughly 95%, per the report.