Westfield not leaving the US after all?

[ClownLoach]

I don't brag often, but I called this months ago... Appears Westfield is going to keep their crown jewels and is refinancing to do so instead of cashing out and leaving the USA. So they wind up in a much better place financially with removal of anything below a "Super A" mall from their books, and as such probably have increased the total value of their portfolio significantly as some lower end malls could have been considered liabilities.

https://www.costar.com/article/11480200 ... s-location

Separately, I received a survey email last week from Westfield about transportation, how I go to their centers etc. And once I answered the questions they thanked me for my input as they "build their new environmental sustainability plan and prepare a mobility transformation plan for their US properties." They wouldn't be doing that if they don't intend to stay with that list of crown jewels. I do think it might have been an error to sell Arcadia, but then other nearby malls have been far less successful so maybe they saw too much risk?

[veteran+]

I don't brag often, but I called this months ago... Appears Westfield is going to keep their crown jewels and is refinancing to do so instead of cashing out and leaving the USA. So they wind up in a much better place financially with removal of anything below a "Super A" mall from their books, and as such probably have increased the total value of their portfolio significantly as some lower end malls could have been considered liabilities.

https://www.costar.com/article/11480200 ... s-location

Separately, I received a survey email last week from Westfield about transportation, how I go to their centers etc. And once I answered the questions they thanked me for my input as they "build their new environmental sustainability plan and prepare a mobility transformation plan for their US properties." They wouldn't be doing that if they don't intend to stay with that list of crown jewels. I do think it might have been an error to sell Arcadia, but then other nearby malls have been far less successful so maybe they saw too much risk?

You "call" many things spot on. I rely on your inside knowledge often.



Thanks for your contributions.

[ClownLoach]

I don't brag often, but I called this months ago... Appears Westfield is going to keep their crown jewels and is refinancing to do so instead of cashing out and leaving the USA. So they wind up in a much better place financially with removal of anything below a "Super A" mall from their books, and as such probably have increased the total value of their portfolio significantly as some lower end malls could have been considered liabilities.

https://www.costar.com/article/11480200 ... s-location

Separately, I received a survey email last week from Westfield about transportation, how I go to their centers etc. And once I answered the questions they thanked me for my input as they "build their new environmental sustainability plan and prepare a mobility transformation plan for their US properties." They wouldn't be doing that if they don't intend to stay with that list of crown jewels. I do think it might have been an error to sell Arcadia, but then other nearby malls have been far less successful so maybe they saw too much risk?

You "call" many things spot on. I rely on your inside knowledge often.



Thanks for your contributions.

Thanks. I think this was a shrewd move on Westfield's part - they created interest from buyers by announcing a giant fire sale, then proceeded to only get rid of their liability properties. The only good mall I think they sold as mentioned was Arcadia but then they got an offer that was probably too good to be true and a local operator who is probably better equipped to help it evolve with the area into a primarily Asian marketplace. But lousy properties like Escondido mall for example are inevitable future liabilities that have a doubtful future (even though that mentioned property is going to get a new Costco to replace the defunct Sears).

They handled the San Francisco property perfectly - creating legal contracts to completely isolate it so their credit wouldn't take a hit. (Remember you can make a LLC in theory that can default, but then you lose that asset which otherwise could have raised your borrowing capacity for the rest of your organization - which is why we don't see as many other operators just walking away and giving their banks the keys)

I expect we will see Westfield ready to swoop in when others stumble their way into bankruptcy, and they'll snap up their crown jewels as well. They also might be able to line up appropriate funds to purchase some of the major privately held malls around the country if their owners ever decide to give up - there are some amazing properties owned by billionaires and their family trusts (South Coast Plaza, the Grove or Americana).

[Bluelightspecial]

I doubt if Caruso would sell Americana on Brand., unless he sold his entire portfolio

[Brian Lutz]

Bellevue Collection would be a big pickup for one of these companies, although I seriously doubt Kemper Freeman would ever want to sell while he's running the place. Westfield also has Southcenter (probably one of the only three viable malls left in the Seattle area along with Alderwood and Bellevue Collection) so it seems unlikely they would want another property that close by.

[buckguy]

What Westfield did in San Francisco is not unusual. Forest City did that with a couple of their weaker properties when they of liquidated their holdings.

Westfield still has some weak or weakened properties to sell--the 3 malls they have in the DC area are good examples. Wheaton is a sub-performer that has had recurring problems with empty space and serves an area that isn't growing and isn't very affluent. It's the kind of mall that probably should be de-malled with mixed-use redevelopment of what's left. Montgomery and Annapolis lost anchors--Annapolis lost 3 of them, but only Montgomery has a clear redevelopment plan (adding housing where a relatively large Sears used to be). Both are in locations with strong demographics, although Montgomery is in an area with a greatly weakened office market (Marriott moved its HQ, the federal govt has been consolidating space, one large complex recently sold for 1/4 of asking) and has to compete with a new mixed use development while Annapolis competes with a popular outlet mall.

[Romr123]

yeah, it seemed their DC properties are a glaring difference from their other properties...Old Orchard is a primo holding as well in Chicago, but is isolated. They'd take an offer but likely aren't too actively shopping it around. If the owner of Oakbrook or Woodfield came-a-knocking...bye bye.

They'd be nuts not to shop around the DC properties.

[ClownLoach]

I doubt if Caruso would sell Americana on Brand., unless he sold his entire portfolio

Caruso seems intent on becoming a politician. But he could have to relinquish control of these more public properties if he succeeds in getting into public office. The situation in LA seems to be getting worse especially with the smash and grab robberies almost daily and the homeless getting worse, now with formerly sympathetic news media calling out the billions of dollars in homeless expense that isn't solving the problem and when translated to cost per housing (giveaway) unit is incredible, sometimes they're paying nearly $1 million per room for a motel after acquisition and remodel cost which is insane. A million dollars could buy dozens of "FEMA trailers" arguably the same size as the converted fleabag hotel rooms. The Dodgers play and while they're at the game at least two players homes get burglarized and ransacked (not sympathetic here, they can afford guards but shows you the magnitude of the crime wave which is going to run the rest of the celebrities out of town).

I think LA is at a breaking point as you could argue the news headlines are getting worse than San Francisco. And it seems there is always at least one LA county supervisor or City Council member under investigation for corruption or other charges. Caruso is back to holding press conferences and media interviews on a regular basis which are actually being productive. He held some interviews after a robbery at the Americana and was practically screaming "why is it acceptable now to drive cars with all the license plates removed? All the cars associated with the robbery had no plates." Suddenly we see that the police are taking HIS direction and pulling people over with no license plates... And they've led to multiple arrests with trunk loads of stolen goods. So the local politicians are useless as always and he's establishing himself as the shadow mayor of LA - I think it's only a matter of time before he finally gets into public office as the people are tired of the situation there.

He is known to be extraordinarily hands on which is why his properties are so flawlessly executed in LA (probably the safest and cleanest public restrooms available - I once anticipated the need and drove 20 minutes out of my way to stop at the Grove because the area I was in didn't look very safe and I was driving my Lexus). I don't think any operator is to his standard, but the one most capable would be Westfield at this point in time. Certainly they seem to have the money that if they were at least hired to manage his properties and he pushed back at them over standards issues they would be capable of addressing them.

[ClownLoach]

yeah, it seemed their DC properties are a glaring difference from their other properties...Old Orchard is a primo holding as well in Chicago, but is isolated. They'd take an offer but likely aren't too actively shopping it around. If the owner of Oakbrook or Woodfield came-a-knocking...bye bye.

They'd be nuts not to shop around the DC properties.

They probably are still shopping a few around but not all as previously reported. They had 33 properties in 2018, currently still have 18 properties and the reports say they'll get down to 12 which are the "Crown jewels."

[Bluelightspecial]

I think the only one's that maybe considered in that group are UTC, Valley Fair, Century City, & Topanga. World Trade Center is just a management agreement with the Port Authority. Even Garden State Plaza and Culver City are questionable as they aren't as upscale.