Newhall Land & Farming Co. said Monday that it had agreed to sell the 720,000-square-foot Valencia Marketplace--one of the largest retail centers in the Santa Clarita Valley--to an investor for $111 million in cash.
The sale ranks as the largest transaction by Newhall, which wanted to take advantage of the surge in prices paid for commercial real estate as well as eliminate the risk of operating retail centers such as Valencia Marketplace. Proceeds from the sale would be used to reduce bank debt and to develop new commercial projects.
Newhall declined to identify the buyer.
"The buildup of our income portfolio continues to be an important goal of the company," Chairman and Chief Executive Thomas L. Lee said in a statement. "We are investing $80 [million] to $100 million this year toward the new commercial development, including the area adjacent to our regional mall called Town Center Drive."
The first phase of Valencia Marketplace opened in late 1996, and the remainder of the project--which is 75% completed--will be opened by the end of this year, according to Newhall spokeswoman Marlee Lauffer. The center's major retail tenants include Wal-Mart, Toys R Us, Circuit City, Sport Chalet, Staples and Cost Plus. Nearly 85% of the existing space is currently leased.