Cypress Acquires LA-Area Mall From Crown
Cypress Equities has purchased the bulk of a Los Angeles-area retail center from Crown Realty & Development and will team up with Crown on redeveloping the other portion.
Cypress paid $250 million for 1 million square feet of the 1.2 million-sf Burbank Town Center, a shopping center that spans 37 acres over eight blocks in downtown Burbank, Calif. Its initial annual yield will be 6%.
The Dallas shop also bought an unspecified stake in the remaining component, a 206,000-sf store that IKEA will vacate. Cypress and Crown will redevelop that site, currently valued at $35 million, into 1,000 apartments and 50,000 sf of street-level retail space.
Eastdil Secured advised Crown, of Irvine, Calif. The deal, which was in the works for about two years, closed a few weeks ago.
Burbank Town Center encompasses an 807,000-sf mall and 428,000 sf of retail space on outparcels. The mall is 99% leased. Macy’s, Sears and Burlington are the anchors. The 231,000 sf of in-line space, which is 95% leased, has average sales of $399/sf.
Cypress plans to pump in $55 million for improvements aimed at making the mall more integrated with downtown Burbank, such as new and enhanced entryways and outdoor seating areas.
The outparcels are occupied by AMC Theatres, Ashley Furniture, Barnes & Noble and Crunch Fitness, in addition to IKEA. That retailer will move this year to a site under construction less than a mile away. The plan is to replace its store with a seven-story building. There would be six floors of apartments, ranging in size from studios to three bedrooms. The street-level retail space could include a supermarket and restaurants. The project, along San Fernando Boulevard, would also include parking, a courtyard and a public plaza.
The mall, formerly called Media City Center, was built around the IKEA store and completed in 1992. Crown acquired all of the space except the IKEA store in 2003 from Pacific Retail Properties of El Segundo, Calif., for $111 million. Crown subsequently purchased that store. It renovated the mall from 2003 to 2006 and lifted the occupancy rate.