ICSC: International Council of Shopping Centers

Mills buys Del Amo Fashion Center for $442 million

The Mills Corp. has bought Del Amo Fashion Center, Torrance, Calif., one of the five largest malls in the United States. Mills paid $442 million for the 2.5 million-square-foot mall, following months of speculation that it was the leading contender for the property.

Mills bought the mall, built in 1975 in the Los Angeles metropolitan area’s South Bay market, from The Torrance Co. The center’s anchors are J.C. Penney, Macy’s, Macy’s Home and Furniture Gallery, Robinsons-May and Sears, and it posts sales per square foot of about $400, Mills says.

A number of large U.S. REITs were mentioned as potential buyers when the center went on the market late last year.

"Del Amo is particularly attractive because of the leasing opportunities it provides," said James A. Napoli, president of Mills’ operating division, in a press release. "Leading retailers and entertainment concepts have expressed tremendous interest in coming to Del Amo."

Mills plans a $160 million redevelopment involving the renovation of 670,000 square feet of existing space and the addition of another 100,000 square feet.

The company financed the purchase through equity and debt, including a $316 million mortgage, and says it may take on an equity partner.

This has been a busy year so far for Mills. The Arlington, Va.–based company has bought stakes in seven centers since February and recently opened its first overseas project, outside Madrid. The company broke ground on two retail-entertainment centers last month, one in the Pittsburgh area and the other near Toronto. It now owns 24 centers in all.