Macerich Sells Panorama Mall for $100M to Primestor

Primestor, a retail sector leader in the CRE industry, has acquired the approximately 315,000 square foot Panorama Mall from Macerich. In an off market deal, an outside source said that the transaction went for just over $100M.

The mall has historic roots in the city and served as the site of Wal-Mart’s first two story location in the nation back in the 1990s. Arturo Sneider, CEO of Primestor Development, said, “We recognize that this mall serves many functions at the center of the community and that its success is vital in the development and lifestyle of Panorama City and its surrounding neighborhoods.”

Industry expert Ed Hanley, president and founder of Hanley Investment Group, shared knowledgable insight with Connect Media regarding the current state of investment in the retail sector.

At what levels are you seeing capital chasing retail investment opportunities? 

The levels remain very high to the point that institutional buyers are becoming very creative when negotiating with sellers.  There have been some very high profile transactions where the sale structure allows for the seller to remain a partner in the property with a minority stake versus the customary outright sale of the asset.

Is retail becoming hotter than the other property types because of its return? 

Retail properties remain in high demand and the returns being offered are very competitive with alternative investments.   

In the retail sector, is there a specific property type that seems to be more sought after by investors? 

Net lease single tenant investments are highly sought after by a variety of investors in today’s market, followed by infill grocery anchored neighborhood shopping centers.

With yesterday being Cyber Monday, how is e-commerce affecting retail on the investment sales side? 

Investors are watching tenant sales very closely, but brick and mortar is doing just fine against the Internet as owners strive to create a better shopping experience for their customers, with the goal of attracting more shoppers.

Primestor’s purchase clearly depicts Ed’s words. Prior to this behemoth acquisition, Primestor’s portfolio was valued at over $750M. This acquisition continues their investment strategy geared towards dense, intense-use urban markets.

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