Santa Monica Place can’t seem to catch a break, with the specialty mall’s value taking another hit as its owner looks to clinch a sale of the property.
The Macerich-owned shopping center’s value is down about 35 percent to $255 million since its loan hit special servicing in April, according to a Monday note from Morningstar Credit. The Santa Monica-based real estate investment trust made the decision to default on its $300 million loan earlier this year, marking its second time in special servicing in the past two years.
The mall’s value has fallen 59 percent from $622 million when the loan was issued, Morningstar said.
Macerich did not immediately respond to a request for comment Monday.
Retail vacancies haven’t helped the 534,000-square-foot property, which sits at 395 Santa Monica Place.
Bloomingdale’s and Arclight Theatre left about 150,000 square feet vacant when they exited the center in 2021.
Last year, Macerich planned on redeveloping that space in what was estimated to be about a $35 million to $40 million project set to come online in phases this year and into next year, according to the company’s 2023 annual report.
Macerich, under CEO Jackson Hsieh, has worked on a plan to cut its debt by about $2 billion while also selling off properties it doesn’t see as having a long-term future in its portfolio.
Hsieh informed analysts this month during the company’s quarterly earnings update it’s looking to sell Santa Monica Place, the Shops at Atlas Park in New York and Southridge Mall in Iowa. The mall owner confirmed it’s set to sell The Oaks mall in Thousand Oaks for $157 million.
Additional talks with lenders or prospective buyers are underway for another four properties, including a sale expected soon for the Lakewood Center in Lakewood, Calif., the company said during its quarterly update.
Outperforming assets, which the company calls its Fortress centers, are viewed as part of Macerich’s future. Locally, they include the more than 1 million-square-foot Los Cerritos Center, which has a portion of the property entitled for multifamily. Another mall, Washington Square in Portland, is seen as having the potential to move up to Fortress level as Macerich seeks to add more luxury tenants to the 1.3 million-square-foot center.
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