Westfield Extends Sale Period for Oakridge Mall in San Jose

Unibail-Rodamco-Westfield has hit a snag in its pending sale of the Westfield Oakridge mall in south San Jose.

The Paris-based owner had expected to complete the sale last quarter of the 1.1 million-square-foot shopping center at 925 Blossom Hill Road, the San Jose Mercury News reported, citing an earnings call. The firm will now allow the undisclosed buyer more time to complete the deal.

In February, the company disclosed the firm had cut a deal to sell the Oakridge mall for an unspecified price, after inking an agreement with a $30 million nonrefundable deposit. The sale was expected to be completed in the second quarter.

This month, Unibail-Rodamco-Westfield “extended the exclusivity period for the sale of Westfield Oakridge,” the company said in its earnings presentation.

The mall owner didn’t say how long the exclusivity period — a time during which the buyer has the sole right to complete the purchase — would last.

The company did cite components of the U.S. economy that could affect the ability of buyers to complete property deals.

“Investment market conditions remain challenging as interest rates stay higher for longer than expected,” Jean-Marie Trinant, CEO of Unibail Rodamco Westfield, said during the earnings call. “Rate cuts in the U.S. have not yet materialized.”

It’s not known whether higher interest rates have held up the deal for the Oakridge mall.

The property, built in 1971, has a property value of $307.9 million, the Mercury News reported in February, citing the Santa Clara County Assessor’s Office.

While its pending sale price isn’t known, the sale of a similar mall in San Jose suggests it may be worth less than half its assessed value.

In January, a real estate group led by Jiashu Xu bought the 1.2 million-square-foot Eastridge Center in east San Jose for $135 million, or $113 per square foot.

The sale of Westfield Oakridge is part of a plan announced by Unibail-Rodamco-Westfield in early 2022 to shed much of its retail portfolio across the U.S. in an effort to whittle down costs.

In June last year, the French firm and its partner, New York-based Brookfield Properties, decided to surrender the Westfield San Francisco Centre mall to its lenders after the loss of its Nordstrom anchor. The nearly 1.5 million-square-foot mall is now under the control of a receiver.

“We are fully committed to our deleveraging plan through disposals in Europe and the radical reduction of our financial exposure to the U.S.,” Trinant said during the earnings call. “The pace at which it goes is slow, but we are pretty confident in our ability to continue our deleveraging through disposals based on the level of active discussions that we have today.”

Unibail-Rodaco-Westfield also owns Westfield Valley Fair, a 2.2 million-square-foot mall in Santa Clara. The company has never indicated it wants to sell Valley Fair, among the nation’s most successful malls.

— Dana Bartholomew