Starwood Capital Group LLC hired Eastdil Secured LLC to broker the sale of U.S. malls valued at about $1.2 billion, according to two people with knowledge of the matter.
Starwood is selling malls it had acquired from Westfield Corp. including assets in Chicago, San Francisco and Cleveland, the people said, asking not to be identified as the sales process is private. Starwood and Eastdil declined to comment.
Bleak earnings forecasts from department stores, Internet shopping and bankruptcy filings by firms including Sports Authority Inc. and teen-clothing chain Aeropostale Inc. have damped demand for malls among investors. Poorer quality malls face a “very tough environment,” Blackstone Group LP’s global head of real estate Jon Gray said June 6.
It’s also getting more difficult to find buyers for lower-tier malls, according to Green Street Advisors LLC. The pool of investors is shallow and funding is elusive, the real estate research firm wrote in a note to clients this month. Several hundred malls could shut down over the next decade, with properties reliant on Macy’s, JC Penney and Sears at the most risk, Green Street estimates.
A Bloomberg index of regional mall landlords has gained 4.4 percent this year.