The transaction was the second-largest retail sale in Southern California this year, according to president Richard Walter and senior managing director Donald MacLellan of Faris Lee, who represented seller HREG Genesis along with the buyer, Brentwood-based Vintage Capital Group. The value of the transaction was not disclosed, but a previous report on GlobeSt.com described it as a $50 million deal.

According to MacLellan, Faris Lee advised the seller on a disposition strategy for this project and identified Vintage Capital Group as a logical buyer bringing both parties together to successfully complete this off-market deal. As part of the disposition strategy, Faris Lee sold off four single-tenant properties at the mall: 24 Hour Fitness, Chili's, Washington Mutual and T Mobile. He says that Vintage Capital represented an opportune buyer for the remaining portion due to the company's "strong experience in mall repositioning and development in order to take the mall to the next level of redevelopment."

Faris Lee says that the sale of the SouthBay Pavilion and the $22 million sale of the Mall of the Great Plains, in which the Irvine-based firm advised the institutional seller earlier this year, are the nation's only two mall sales for 2009.

Built in 1993 and renovated in 2005, 2006 and 2007, SouthBay Pavilion is approximately 92% leased with tenants including Old Navy, Children's Place, Big 5 Sporting Goods, Panera Bread, Anna's Linens, Chuck E Cheese, Foot Locker and Tony Romas. The mall is anchored by IKEA, Target, JCPenney and Sears. The IKEA land was included in the sale; JCPenney, Target and Sears own their buildings and were not part of the transaction.

Walter notes that the loan assumption process, with which Faris Lee assisted, was a critical component to closing the deal. "With the current state of the capital markets and lack of overall financing, it was imperative for us to proactively work with the existing lender and their appraisers to close this transaction," Walter says.

Instant Insights /

Retail Sale Completes Disposition Strategy

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