Simi Valley Mall Put Up for Sale

Five years after the opening of the Town Center in Simi Valley the owner has put the upscale retail and restaurant complex up for sale. Putting the shopping center on the market fits with the strategy of Forest City Enterprises to raise cash in an economy that has hit hard the Cleveland-based owner of retail, office and residential properties. The Town Center is no exception, even with an 86 percent occupancy rate. The shopping center has been left with empty storefronts after furniture retailer Z Gallerie, The Bombay Co. Inc, and denim and casual apparel retailer Anchor Blue all filed for bankruptcy protection and closed stores. Jeweler Ben Bridge and leather goods and handbag retailer Coach have also moved out. Forest City spokesman Jeff Linton cautioned not to read too much into the fate of the Town Center. From time to time Forest City does sell properties to take advantage of too-good-to-pass-up offers, rebalance between property types, or take a different approach in the market, he said. The move to sell in Simi Valley is in contrast to what Forest City is doing with the Antelope Valley Mall, its aging property in Palmdale. There a Macy’s will open in September in a vacant building left behind by the bankruptcy of Gottschalks. Certainly the overall economy with its steep drop in consumer spending played into the decision to sell the Town Center. High vacancy rates in commercial property can be found throughout the region with the Los Angeles County Economic Development Corp. forecasting a 7.2 percent vacancy rate for the metro region this year. With due dates on the loans used to build new shopping centers on the horizon, lower sales and property values will lead to foreclosures and indicate that the bottom has not been reached in the commercial real estate market. “There are a lot of troubled properties out there,” said Brian Gabler, assistant city manager and director of economic development for Simi Valley. “Is it a total surprise to see this go on the market? Not really.” Large investment In the case of the Simi Valley property, the mortgage is not due and the decision to sell was jointly made by Forest City and its partner in the project. Forest City has put a significant amount of money into building and operating the 612,000-square-foot center and expects a new owner will continue that. “It will need some reinvestment to keep it fresh and vibrant the way it is now to be a competitive offering in a competitive market,” Linton said. A unique role the Town Center fills is that of a gathering place in a city lacking a true downtown area. The mall plays host to a weekly farmer’s market, movie screenings and live music performances. As the largest retail center in Simi Valley and stocked with well-known national names including Macy’s, Apple, Urban Outfitters and Victoria’s Secret, the Town Center is a major tax generator. When being built, its construction jobs were a boost to the Ventura County economy. Shoppers, diners, and other visitors should expect a seamless transition once a new owner takes over, Linton said. While there may be a little anxiety over the new ownership that is tempered by excitement that they will have the money to back it up, said Bruce Stenslie, head of the Economic Development Collaborative – Ventura County. “Whoever has the wherewithal to make a purchase of that kind of facility today is also somebody who is looking to invest in it,” Stenslie said. Forest City chose Holliday Fenoglio Fowler, L.P. as the broker for the Town Center sale. Marketing the project The firm promotes the retail center by playing up the affluence of Simi Valley, that there is additional land for growth, and that it is located adjacent to Archstone Simi Valley apartment community. Attempts to reach a representative of HFF were not successful. As a regional shopping center, the Town Center will be attractive only to those firms experienced in owning and operating a project of that size, said Bill Rose, state director for Southern California with the International Council of Shopping Centers. The names that immediately come to mind are Simon Property Group, owner of the Camarillo Premium Outlets and Promenade at Camarillo Premium Outlets; Westfield Group, which owns a number of shopping centers in the Valley; and Macerich Properties, owner of The Oaks in Thousand Oaks, and Panorama Mall in Panorama City. “They are all in good shape,” Rose said. “The question is is it priced right for them to see an upside in the deal.”