HOUSTON — Los Angeles-based Pacific Retail Capital Partners has acquired Houston's West Oaks Mall. The distressed retail property was purchased in an all-cash transaction for $15 million from Miami Beach, Fla.-based LNR Partners, which became the special servicer for the property following its 2008 foreclosure. The sale price marks a significant discount from what the mall traded for just 4 years prior.
This sale caps off a tumultuous recent history of the mall. The principals of Pacific Retail Capital Partners purchased the 1.08 million-square-foot mall for the first time in 2003 when they were with investment group Somera Capital. The property was renovated and sold to Investment Properties of America in 2005 for $102 million. Following Investment Properties' collapse in 2008, the property was placed in holding with LNR Partners and put up for sale.
With the ownership uncertain and a continuing recession, occupancy has suffered at the mall, which is situated on 100 acres at the corner of Westheimer Road and State Highway 6. Of its five anchor spaces, only three are occupied by Dillards, Macy's and Sears. The two vacant anchors were previously leased to JCPenney and Mervyn's before the department stores left the property. The remainder of West Oaks Mall is approximately 60 percent occupied. Even with significant vacancies, Pacific Retail sees opportunities here.
“West Oaks Mall is an incredible value and well-located in a thriving community, but it also requires a significant investment of management and leasing expertise to reposition the mall,” said Steve Plenge, managing principal of Pacific Retail Capital Partners, in a statement. “We will work to repair the center's image in the community as well as invest capital to refresh the property and potentially undertake some redevelopments.” Plenge mentioned the largely vacant wing that formerly contained Mervyn's as an ideal candidate for redevelopment.
Pacific Retail has partnered with Collarmele Partners to handle the leasing, management and redevelopment of the mall. Robert Williamson and Rusty Tamlyn of the Houston office of Holliday Fenoglio Fowler represented LNR Partners in the sale.
— Coleman Wood