News Summary
Washington Prime Group has announced the sale of its stake in the Westminster Mall as part of its restructuring following a Chapter 11 bankruptcy. This decision impacts Shopoff Realty’s plans for a significant redevelopment project, Bolsa Pacific, which aims to transform the mall and surrounding area into a mixed-use development. Shopoff recently acquired part of the mall with plans for new homes and amenities. The future of the mall remains uncertain amid declining retail performance and shifts in consumer behavior.
Westminster, California – Washington Prime Group (WPG), a real estate investment trust based in Ohio, has announced its decision to sell its stake in the Westminster Mall, a major 1.2-million-square-foot indoor shopping center in Orange County. This development poses potential challenges for Shopoff Realty Investments, based in Irvine, which has ambitious redevelopment plans for the mall, known as “Bolsa Pacific.”
The stake sale by WPG is part of its ongoing restructuring efforts following its Chapter 11 bankruptcy filing in 2021. Over the past year, the company has divested roughly half of its national portfolio and intends to sell additional properties, including its share of the Westminster Mall. This decision comes in response to significant layoffs and a focus on narrowing its operational scope, further complicated by declining retail sales spurred by the rise of online shopping.
Shopoff Realty had previously acquired a 26-acre portion of the Westminster Mall for approximately $95 million in two separate transactions in 2022, with the intention of redeveloping the area. The plans for Bolsa Pacific include the construction of up to 1,200 new homes, comprising 1,065 rental units and 102 townhomes, alongside additional amenities such as a 175-room hotel, 25,000 square feet of retail space, and 2.5 acres of green space featuring an amphitheater, dog park, and pickleball courts.
Despite encountering hurdles, Shopoff has expressed optimism about progressing with Bolsa Pacific. The last updates on the redevelopment plans were issued in 2023, highlighting a multiuse development model that integrates both commercial and residential elements. However, the sale of WPG’s stake could complicate these efforts, as changes in ownership may affect project entitlements and commitments to community engagement.
WPG’s Westminster Mall is currently the 18th largest shopping center in Orange County, generating $120.1 million in taxable income, although this figure reflects a year-over-year decline of 1.6%. The mall has faced challenges in retaining tenants, and many stores have closed as consumer behaviors have evolved. Despite this, major retailers such as Best Buy, Macy’s, JCPenney, and Target continue to operate within the mall.
Redevelopment projects like those proposed by Shopoff Realty are becoming increasingly common as many aging malls across the country transition into mixed-use developments, a response to the ongoing challenges faced by traditional retail spaces. Local officials have articulated a desire for collaborative redevelopment efforts among various stakeholders of the Westminster Mall to further enhance the area’s community living environment.
The outcome of WPG’s stake sale and Shopoff’s ongoing development ambitions remains uncertain. As WPG continues its liquidation of assets and as Shopoff navigates the complexities of a potential redevelopment, the future of the Westminster Mall hangs in the balance, with significant implications for local residents and the economy of Westminster and the surrounding areas.
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Additional Resources
- The Real Deal: Washington Prime Group Selling Stake of Westminster Mall
- OC Business Journal: Westminster Mall Put on the Market
- Connect CRE: Shopoff Unveils Plans for Mixed-Use Project at Westminster Mall
- OC Register: Westminster Mall Redevelopment Proposals Are Being Submitted
- Spectrum News 1: Westminster Mall’s Redevelopment Plans Include 1,100 Homes
