Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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130 • SHOPPING CENTER BUSINESS • MAY 2015 formers in their respective markets and submarkets. "The opportunity that is unique here is that everything has been cherry-picked," says Wolstein. "We've been able to hire all of our own people; we've been able to acquire all our own assets and we have no legacy issues on either side. There is no deadwood that we inherited from real estate or personnel." With leasing and development led by former retailers, Starwood has taken a cooperative approach when it sits at the bargaining table. "We want retailers to know that we are a collaborative partner," says Wolstein. "We aren't going to be the landlord that fights over every last nickel. If tenants make money with us, they are going to want to do deals with us. We want to find solutions for retailers so they can enhance their business with us." Internally, the company has created platforms, processes and practices based on the collaboration of its employee base. With the majority coming from other real estate companies, it has been a task that has resulted in many best practices. "There's a great deal of retail real estate experience among our staff," says Brown. "That helps us when we are building our systems since they know the industry so well. It made it easier to build our process- es and systems from the ground up. We have the opportunity to learn from all the companies that we came from, embracing the good and avoiding the bad parts." Building A portfolio Today, Starwood Retail Partners has about $6.5 billion in properties owned and under management. That portfolio is part of Starwood Capital's overall $40 billion in real estate assets that it has un- der management. Starwood Capital has raised in excess of $10 billion in equity over the past three years, already putting most of that to work in solid real estate investments throughout the world. The first acquisition that Starwood Re- tail made was the portfolio of seven re- gional malls from Westfield. Those cen- ters were: Chicago Ridge and Louis Joliet Mall in suburban Chicago; Westland Mall in Miami; Solano Mall in the San Fran- cisco Bay area; Metreon in San Francisco; Gateway Mall in Lincoln, Nebraska; and SouthPark Mall in Cleveland. The centers were 93 percent leased at the time they were acquired. In 2012, Starwood also ac- quired The Avenue Forsyth in Cumming, Georgia, from Cousins Properties, and re- branded that The Collection at Forsyth. Starwood bought seven more proper- ties totaling nearly 8 million square feet from Westfield in November 2013 in a $1.6 billion transaction. Those centers in- cluded three centers in Ohio: Belden Vil- lage Mall in Canton, Franklin Park Mall in Toledo, and Great Northern Mall in North Olmsted; two in California: Park- way Plaza in El Cajon and Plaza West Covina in West Covina; Capital Mall in Olympia, Washington, and Southlake Mall in Merrillville, Indiana. "Westfield is one of the best operators in the world, so these were high quality assets that really created the core of our company," says Wolstein. Shortly before the second Westfield acquisition, Starwood acquired three cen- ters from Macerich totaling about 2.5 mil- lion square feet. It acquired Rimrock Mall in Billings, Montana, which is the largest and most popular mall in the state. It also acquired Northridge Mall in Salinas, Cali- fornia, a top center in California's Central Coast area, and Kitsap Mall in Silverdale, Washington. In 2014, the company acquired The Promenade at Bolingbrook from Forest City Enterprises and Hamburg Pavilion from Lubert-Adler/Core Ventures. Later that year, Starwood acquired seven prop- erties from Taubman for $1.4 billion. Included in that transaction were two centers in Virginia: Stony Point Fashion Park in Richmond and MacArthur Cen- ter in downtown Norfolk; two centers in Michigan: The Mall at Partridge Creek in Clinton Township and Fairlane Town Center in Dearborn; Northlake Mall in Charlotte, North Carolina; The Mall at Wellington Green in Wellington, Florida; and The Shops at Willow Bend in Plano, Texas. Starwood Retail works very closely with the team at Starwood Capital's headquar- ters in Greenwich, Connecticut, on ac- quisitions and finance matters. All of the Solano Town Center in Fairfield, California, is a center that is a regional draw, creating a high barrier to entry market. Great Northern Mall in North Olmstead, Ohio, is one of four centers that Starwood Retail owns in Ohio.

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