Baldwin Hills Crenshaw Plaza

Baldwin Hills Crenshaw Plaza is an 850,000 square foot regional mall in the highly sought after market of Los Angeles, California. At 43 acres the property is virtually impossible to recreate within the dense and infill Los Angeles market. The was asset is anchored by national credit tenants Wal-Mart, TJ Maxx, Sears (NAP), Robinsons-May (NAP), and Albertsons. Non-anchor tenants include Wells Fargo, Bank of America, One United Bank, Lane Bryant, New York & Company, Payless Shoe Source, Hollywood Video, Waldenbooks, Foot Locker, Foot Action, Ashley Stuart, GNC, Bath & Body Works, Forever 21, Verizon, McDonalds, EB Games, Crescent Jewelers, Daniel's Jewelers, Radio Shack and many more. The REZA team was involved in the disposition of this asset on two separate occasions.

The property was viewed as a value-added opportunity and raised many objections with investors due to a number of factors. It is located in the heart of South Los Angeles which suffers from below average income demographics and above average criminal activity. The mall had ongoing occupancy issues and the interior shop tenants had experienced historically low sales. Just prior to the mall's sale, Baldwin Hills Crenshaw Plaza backfilled a vacant anchor space with Walmart. This was one of the first regional malls in the country to place a Wal-Mart in an enclosed regional mall setting. This caused many tenants and investors to fear that the category killer's presence in the mall would negatively impact the mall's overall sale numbers.

Our marketing approach emphasized that the mall would prosper in the long term and that the Wal-Mart would have a positive impact on the inline tenants by generating more foot traffic. Our team was successful in identifying and placing a private investor with no previous mall ownership/operating experience into this property with an approximate $15 million initial equity investment on a $68 million transaction.

During this transaction, the mall was repositioned to catered to a heavily ethnic market and thus was unattractive to many institutional investors. The rents were well below market, which effectively translated to a lower first year Net Operating Income compared to subsequent years. The seller also requested that the buyer accommodate their search for a 1031 exchange property.

Through our extensive marketing efforts and broad exposure of the property, our team was able to generate over twenty (20) offers from a broad spectrum of both private and institutional investors. Our team placed an emphasis on both the data pointing to strong retail spending patterns for ethnic populations and on the potential to develop a residential component on the property. Ultimately, we were able to market the property with great success and procured a buyer that was sensitive to the seller's search for an exchange property. The transaction closed at $136,000,000.

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