The Baldwin Hills Crenshaw Plaza shopping mall has changed hands for the second time in four months.
In a deal announced Monday, privately held real estate company Hager Pacific Properties acquired the property for $38 million in cash and assumed $30 million of debt from Pan Pacific Retail Properties Inc., the largest shopping center operator on the West Coast.
For The Record
Los Angeles Times Wednesday April 02, 2003 Home Edition Main News Part A Page 2 National Desk 1 inches; 56 words Type of Material: Correction
Crenshaw Plaza sale -- An article in the Business section Tuesday on the sale of Baldwin Hills Crenshaw Plaza incorrectly said the new owner of the mall -- Hager Pacific Properties -- also owns or operates the El Monte Town Center and the Thousand Oaks Promenade. In fact, the two malls are managed by Festival Cos.
The deal gives Encino-based Hager a 850,000-square-foot enclosed mall near Martin Luther King Jr. and Crenshaw boulevards in South Los Angeles that, according to some observers, may now be starting to hit its stride.
The long-struggling shopping center has seen retailers come and go since it was built in 1988, but the addition of a three-story Wal-Mart this year appears to have given the mall a boost, analysts say.
"I think it's a well-positioned shopping center in an urban area with Wal-Mart coming in as an anchor tenant," said Brent Howell, a retail leasing broker at CB Richard Ellis, who was not involved in the deal.
"It's a fine investment to own," he said.
When Wal-Mart opened, it took the space of a vacant Macy's department store that had closed nearly four years before. Crenshaw Plaza also hosts a Sears, Robinsons-May, TJ Maxx and Albertson's supermarket. Magic Johnson Theatres became a tenant in 1995.
Wal-Mart's presence already has helped other retailers. The store's sales have been higher than expected since its opening in January, spurring more pedestrian traffic throughout the mall.
"I believe the area is underserved by good-quality retail, so I believe Wal-Mart will be the catalyst for the area," said Larry Kosmont, president of Kosmont & Partners, a real estate consultancy.
Adam Milstein, Hager Pacific's chief financial officer, also sees the mall's advantages, given that it is in a densely populated area with about 1.2 million residents within a five-mile radius.
"We believe this property has tremendous potential to grow and improve in the future," he said.
Moreover, a retail and residential project in development just west of Crenshaw Plaza would complement the property and add to the neighborhood's shopping options, he said.
At the same time, the real estate company plans to renovate the mall's food court, refurnish the restrooms, paint the center's exterior and interior and improve parking, Milstein said.
Hager owns or manages 8 million square feet of industrial properties and shopping malls, including the El Monte Town Center and the Thousand Oaks Promenade, as well as 3,000 apartment units.
As part of its deal with Pan Pacific, Hager sold an Escondido shopping center to Pan Pacific for $33 million.
For Pan Pacific, it was just the kind of property the San Diego-based company has been shopping for. Pan Pacific has been shedding its larger shopping malls, such as Crenshaw Plaza, for supermarket-anchored neighborhood centers.
Last month, the company finalized the sale of the 1.2-million-square-foot Burbank Media City Center for $111 million.
Pan Pacific acquired the Crenshaw and Burbank malls in November from Center Trust when it bought the Manhattan Beach-based real estate company for $219 million.
"Pan Pacific plans to sell nonconforming centers," Howell said. "They're more invested in supermarket and drugstore kinds of neighborhood shopping centers."
The strategy also allows Pan Pacific to pay off debt, said President and Chief Executive Stuart A. Tanz. The company had about $984 million in debt as of March 21.
Shares of Pan Pacific closed Monday at $37.85, down 28 cents, on the New York Stock Exchange.