Despite Retail Retreat, Starwood Buys West Palm Beach Mall for $130M
Despite shying away from retail in recent years, Starwood Capital Group purchased a West Palm Beach mall for $130 million, property records show.
The deal comes only weeks after the Miami Beach-based investor sold a mall in suburban Miami for $149.4 million. Over the past two years in light of the pandemic, which accelerated the ongoing decline of retail property values, Starwood sold 22 of its 30 malls, as of July 2021.
“With further deterioration caused by COVID, committing substantially more capital required to successfully reposition many of our assets became unviable at our existing cost basis,” Mark Deason, a managing director at Starwood, told Bloomberg.
Perhaps Starwood, led by billionaire Barry Sternlicht, is not completely done with retail.
Unlike the indoor mall near Miami, the West Palm Beach retail center is an outdoor, neighborhood retail center. Anchored by a Whole Foods grocery store, the 303,705-square-foot complex features big-box stores, such as Nordstrom Rack, Bed Bath & Beyond, TJMaxx and Ulta Beauty.
The mall’s Whole Foods, located at 1821 Palm Beach Lakes Boulevard, is the popular grocery’s closest outpost to Palm Beach, an island town that boasts one of the wealthiest zip codes in the country. Movie star Sylvester Stallone, former President Donald Trump and Blackstone CEO Stephen Schwarzman are all Palm-Beach homeowners.
The shopping center’s seller, Clarion Partners (CPREX), bought the property for $116.7 million in 2015, per records.
Starwood secured a $79 million loan from Wells Fargo (WFC). A representative for both Starwood and Clarion did not immediately respond to a request for comment.
Julia Echikson can be reached firstname.lastname@example.org.