Pacific Retail Capital Partners Buys 1 MSF Inland Empire Mall

Dick’s Sporting Goods anchors The Shops at Palm Desert. Image courtesy of Pacific Retail Capital Partners

Pacific Retail Capital Partners, a Los Angeles-based retail investment, development and management company, has acquired The Shops at Palm Desert, a nearly 1 million-square-foot enclosed mall in Palm Desert, Calif., in the heart of Coachella Valley. The firm plans to transform the 72-acre property into a mixed-use destination.

Built in 1982 and renovated in 2013, the mall had previously been owned by Europe-based Unibail-Rodamco-Westfield. The property went into foreclosure with a third-party special servicer and the name was changed from Westfield Palm Desert to The Shops at Palm Desert by October 2021. A 575,000-square-foot portion of the mall, not including the anchor stores, had served as collateral for a $125 million interest-only mortgage that was securitized in 2014 into CMBS, according to Trepp. In August, Trepp reported general terms for a loan modification and assumption had been agreed upon but no details were given at that time.

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Most recently, URW sold Westfield Valencia Town Center, a 1 million-square-foot shopping mall in Santa Clarita, Calif., to Centennial Real Estate in September as part of its ongoing two-year deleveraging strategies for U.S. properties. Centennial purchased the asset for $4 million in excess of the property’s existing $195 million debt; URW had defaulted on the loan in January. Also this year, URW sold Westfield Mission Valley and Westfield North County Fair, two shopping centers with a total of 2.7 million square feet in the San Diego, Calif., area.

Palm Desert details

The only enclosed mall in Coachella Valley, The Shops at Palm Desert attracts residents and tourists alike. Anchored by JCPenney, Macy’s, Dick’s Sporting Goods and Barnes & Noble, the mall has more than 100 retail stores and eateries including Champs Sports, H&M, Bath & Body Works, Express, GameStop and Hot Topic. World Gym, Elite Cosmetology and College of the Desert are also tenants at the property located at 72-840 Highway 111.

While PRCP has not yet announced specifics for the site’s redevelopment, CEO Steve Plenge said in prepared remarks they plan to unencumber underutilized retail space and add a mixed-use component that would include green space, multifamily housing and entertainment offerings. Plenge noted the company specializes in transforming and repositioning malls through a value-add strategy.

PRCP deals, redevelopments

The Shops at Palm Desert marks the second acquisition made by PRCP this year. The first one was in May, when the firm entered the New Jersey market by purchasing the 1.2 million-square-foot Bridgewater Commons mall and the adjacent Village at Bridgewater Commons, a 94,000-square-foot open-air shopping center. PRCP assumed Bridgewater Commons’ existing loan and secured an extension that will provide the company time to execute its plan to transform the mall into a mixed-use destination.

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Other mall-to-mixed-use projects PRCP is involved in across the country include:

• The site of the former Galleria at White Plains in White Plains, N.Y., where PRCP, in partnership with the Cappelli Organization and SL Green, has proposed a $2.5 billion mixed-use project that would demolish the now shuttered 900,000-square-foot mall and two parking garages and build seven residential towers with more than 3,000 units, a food hall, retail shops and pedestrian promenade. Nearly half of the District Galleria site would be open space.
• Yorktown Center in Lombard, Ill., where PRCP acquired the former Carson’s anchor box and is transforming it into a mixed-use destination by adding more than 600 multifamily units and a park.
• The Shops at South Town in Sandy, Utah, where efforts are underway to reposition the site into a live, work and play environment by building more than 1,000 multifamily units and adding office and hotel components along with additional retail and restaurant space.

PRCP also made its first foray into Arizona in September, when it assumed management and leasing responsibilities at a 1.1 million-square-foot retail center in Tucson, Ariz. Park Place entered special servicing earlier this year, when Brookfield Properties defaulted on a $200 million loan.