1M-SF Mall Trades for $50M

The mall, which is located off of the 405 Freeway at the Avalon Boulevard exit, is known to many in Southern California as the Ikea Mall because the furniture store is visible from the 405 Freeway. In addition to Ikea, the center is anchored by Target, Sears and JC Penney, with 54 specialty stores and restaurants including brands like Old Navy, Children's Place, Foot Action, Panera Bread, Panda Express, Sansai Grill, Five Guy Burgers, Wing Stop and Jamba Juice.

Sands said in a statement that, "We can't go wrong with this location just off of the 405 Freeway with more than 350,000 cars a day driving by. With 73 acres of land we have room to expand." Sands said his team is negotiating with seven national restaurant chains and intends to add at least three free-standing restaurants. Since the mall is located in a major employment center, the mall has 150,000 workers nearby "creating a tremendous demand for additional restaurants," he says.

The Vintage leasing team will first address the mall's 35,000 square feet of currently available space and is in discussions with several national fashion retailers and other major retailers that are still expanding despite the weak economy. Once that space is filled, the new ownership will begin work on its expansion program.

In addition to increasing the restaurants offered, Vintage plans to enhance the mall's appeal as a destination by adding a cinema. It is in preliminary talks with two movie theater operators to bring a 16-screen stadium seating theater to the property, and over the long term Sands also envisions the addition of a hotel.

Seller HREG Genesis completed a $30 million remodeling of the center in 2007. "This is a very significant acquisition particularly in light of the difficulty of obtaining financing on regional malls today. Not only are the capital markets frozen, but some people are worried about how retail sales will hold up during the recession," notes Brenton Watson, president of Vintage Real Estate, which is a wholly owned division of Vintage Capital Group. Sands formed Vintage Capital Group in 2001 to continue his private investment activities in commercial real estate and operating businesses of the past two decades.

Watson points out that some major Southern California mall owners are still making huge investments in existing properties, including the Irvine Co.'s recently announced plan to spend $100 million remodeling Fashion Island, a 1.5-million-square-foot mall. Westfield recently completed the remodel of the 800,000-square-foot Century City mall and it is involved in a major expansion of its Culver City mall.

Sands' has been quietly acquiring regional malls at what he considers to be bargain prices for the last few years through Vintage Real Estate, which includes six former Westfield executives. Sands previously was the owner of Fred Sands Realtors, Southern California's largest independent residential real estate brokerage and financial services companies. He soldFred Sands Realtors to Coldwell Banker in November 2000.