New life for struggling Bay Area mall
A 40-year-old mall in San Francisco’s East Bay that was put on the auction block has been snatched up by a partnership that pledges to revitalize the “irreplaceable” property.
New owners LGB Real Estate Companies and Aviva Investors see a successful, mixed-use future for the 1.1 million-sq.-ft. retail center.
In a press release LBG stated it would take advantage of Hilltop’s location to build more than 9.600 housing units, office space, and hotels and revitalize the site’s viability to support retail, dining and entertainment.
Situated 20 miles northeast of San Francisco and 25 miles south of Napa in Richmond, the 77-acre site has its own exit off of Interstate 80 and offers views of San Francisco Bay.
“The Hilltop District has the potential to become the premier East Bay residential, mixed-use, walkable community of the future,” said Doug Beiswenger, managing partner in charge of entitlements and construction for LBG.
Vacancy rates have shot up at Hilltop Mall in recent years. Original anchor J.C. Penney is closing this month. LBG has in mind a retail rebranding and renovation that will include significant upgrades to the building exterior, interior common areas, and signage.
“The surrounding neighborhood has great growth opportunities that contribute to a strong value-proposition,” said Russ Bates, head of the Americas for Aviva Investors’ Global Indirect Real Estate Group.
C-III Asset Management handled the transaction as special servicer for a CMBS securitization. The purchase price was not disclosed.
Ratings service: B malls still reasonably strong
Death knells for B-Class malls are rung regularly by the general business press and tech pundits, but a major ratings service is telling investors to hold off on funeral plans.
“There’s certainly been far more store closings in 2017 than in previous years…but I think it’s fair to say that investors are comfortable that bricks-and-mortar retail won’t disappear,” said Fitch Ratings managing director Huxley Somerville in a video released by the company this week.
Asked by Chain Store Age to assess Fitch’s outlook for B malls in near future, Huxley presented a scenario that’s less about which stores leave a property than it is about how mall owners fill the empty space.
“We have to look at these malls and understand how a reasonably strong and stable operating history might change over the next five to 10 years,” Somerville said. “There will be dead malls, but will they have life in another format?”
Of course, the most-used word in real estate — location — comes into play.
“If you have a property in an in-fill location, surrounded by residential property, it’s going to be more valuable than a property on the edge of town,” Somerville said. “The former is the kind of thing that would make us less conservative in our assessment of the value of a mall.”
Mixed-use projects and dining and entertainment replacements for closed anchors are among the factors that can keep such properties relevant for years to come.
“We’re definitely not of the opinion that retail is going to hell in a handbasket,” Somerville said.
See’s Candies to open new stores in The Golden State
A specialty retailer continues to expand its breadth.
See’s Candies plans to open nearly a dozen new or relocated stores by the end of 2017. All new locations will set up shop in California.
The new stores will be located in San Jose, Castro Valley, Manhattan Beach, Paso Robles, Laguna Hills, Glendale and Calabasas. The new locations come on the heels of new shops that have previously opened or moved this year into new or larger locations in Escondido, Windsor and Pleasant Hill, California.
“When deciding where to focus our new retail shop locations, it was important for us to see where customer demand was,” said Ann Ostrander, senior VP of sales at See’s Candies.
“Many of our new and relocated stores are in convenient locations in outdoor malls and strip centers where our consumers are shopping these days,” said Ostrander. “In this time of uncertainty for many brick-and-mortar retailers, we’re very excited to be growing and expanding our retail presence throughout California, as we also look to add retail locations in the other states.”
See’s currently operates more than 240 locations, as well as an e-commerce site.