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Commercial Real Estate

Macerich to Buy Another Mall

Deals: The real estate investment trust, known as the 'mall doctor,' will pay about $150 million for The Oaks shopping center in Thousand Oaks.

June 11, 2002|BRAD BERTON | SPECIAL TO THE TIMES

Shopping mall owner Macerich Co., which announced a $662-million agreement to buy the largest mall operator in Phoenix last week, also will expand its holdings in Ventura County with the purchase of The Oaks shopping center in Thousand Oaks.

The Santa Monica-based real estate investment trust will pay about $150 million for the popular 1-million-square-foot Conejo Valley property, Macerich's Chief Executive Arthur Coppola said Monday. Macerich already owns Pacific View, the largest mall in Ventura County.

Reflecting years of consolidation in the department-store industry, The Oaks includes a Robinsons-May at each end of the mall (one devoted mostly to men's wear and home furnishings) along with Macy's, a Macy's Men's & Home Store and a J.C. Penney. The department stores' parent companies own their buildings.

Representatives of The Oaks' current owners, the largest of which is the California State Teachers Retirement System pension fund, declined to discuss the pending sale, but Coppola confirmed that the price is about $150 million.

Macerich's portfolio is concentrated in California, where it owns and operates large regional malls including Westside Pavilion, Santa Monica Place, Lakewood Center, Los Cerritos Center and Stonewood Center in Downey.

The REIT has been known in shopping center circles as the "mall doctor" for its expertise at improving the quality of tenants, physical plants and rental revenue. Macerich completed an $89-million expansion and improvement program at the Pacific View (formerly Buenaventura) mall in Ventura last year, which included two new anchoring department stores.

The Oaks also will undergo some kind of upgrade, although the mall is apparently performing well. The Oaks generates an average of $437 in sales per square foot, Coppola said, a rate he considers "quite good" considering there hasn't been any substantial renovation for many years.

Macerich sees opportunities to increase revenue there by consolidating either the two Robinsons-May stores or the two Macy's into a single upscale department store, Coppola said, and officials at the stores' parent companies have expressed interest in such a move. That would open up a building for another department store or perhaps provide more space for shops and specialty merchants.

Macerich will consider improving The Oaks' roster of entertainment tenants and restaurants, Coppola said, adding that the area's demographics would support more upscale stores.

Encino real estate broker Dick Carter of Centers Business Management said improving The Oaks' strong sales figures won't be easy, but he suggested that Macerich might consider improving landscaping at the prototypical 1970s-era mall Carter described as "department stores and shops surrounded by a sea of asphalt."

The two-level mall anchors an active retail district along the Ventura Freeway. With 130 stores and a United Artists theater complex, the 90-acre property sits along the north side of the freeway at Lynn Road.

CalSTRS and minority partner Trizec Properties Inc. purchased The Oaks in 1991, reportedly for about $94 million. CB Richard Ellis Investors is CalSTRS' financial advisor overseeing the pension fund's investment in The Oaks.

Macerich shares were down 15 cents at $28.50 on the New York Stock Exchange.

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