Few details were released by Macerich President Ed Coppola and Simon CEO & Chairman David Simon, including the cost to develop the Los Angeles County site, possible tenants and attractions. It will likely have multiple uses, as Simon, a global developer and operator of retail and mixed-use destinations, recently announced it was spending about $4 billion at its various retail properties to create more mixed-use, experiential-oriented centers.
“Both retail REITs have invested billions in premium acquisitions and strategic developments incorporating dining, entertainment, fitness and mixed-use elements,” Michael Lagazo, an independent retail broker, told Commercial Property Executive. “In addition to improving portfolio productivity, the joint venture development delivers prime access to one of the nation’s desirable markets with an affluent trade area with 2.5 million shoppers within 10 miles.”
The outlet center is expected to attract the region’s most affluent residents and international tourists. It will have a frontage of the high-traffic Interstate 405 Freeway, and also be visible from the Interstate 110. It is also just west of the Interstate 5 corridor, south of the Interstate 10 Freeway and about 11 miles from LAX, the nation’s second-busiest airport. The site is also just a short drive from another high-profile local project—the City of Champions Stadium, future home of the NFL’s Los Angeles Rams and Chargers. The stadium is part of a $3 billion mixed-use complex under construction on a 298-acre site in Inglewood that includes the former Hollywood Park Racetrack property. A sports and entertainment district with the stadium as the centerpiece are part of the redevelopment that includes retail and office space, a hotel, performing arts center and about 2,500 residential units.
Simon and Coppola described their 50-50 joint venture as the creation of a “uniquely situated, elevated shopping destination.” Site work is beginning immediately on the 400,000-square-foot first phase. An additional 166,000 square will be built in a second phase.
“Our city is thrilled that this exciting project is moving forward, led by Macerich and Simon,” Carson Mayor Albert Robles said in a prepared statement. “We see this high-quality outlet center as one that will add value to our community for many years to come, attracting locals and tourists from all over the world.”
Lagazo said the project “aligns with the acquisition and redevelopment strategy of both Macerich and Simon Property Group.” But he did question if there is there enough alignment in leasing strategy between Macerich and Simon to achieve the desired returns.
Simon builds, transforms
Meanwhile, Simon is opening the $134 million Denver Premium Outlets on a 94-acre site in Thornton, Colo., on Sept. 27. Simon broke ground on the 330,000-square-foot open-air shopping center in October 2017. It is one of 92 Simon Premium Outlets in the United States, Puerto Rico, Canada, Japan, Malaysia, Mexico and South Korea. Some of the big U.S. centers are Woodbury Common outside New York City, Orlando Premium Outlets in Florida, Las Vegas Premium Outlets and Wrentham Village Premium Outlets in Boston.
Los Angeles Premium Outlets is expected to include such retailers as Michael Kors, Coach Outlet, Kate Spade New York, A/X Armani Exchange, Boss-Hugo Boss, Converse, Cole Haan Outlet, Gap Outlet, Guess Factory Store, Helzberg Diamonds and Polo Ralph Lauren Factory Store.
In May, Simon announced it was beginning a multibillion-dollar program to transform some of its major shopping centers with more experiential offerings as well as adding mixed uses like residential and office space. Phipps Plaza in Atlanta is getting a boutique hotel, a LifeTime wellness center and Class A office tower.