The buyer is a newly formed joint venture affiliated with Red Development, a Phoenix-based mixed-use real estate company.
Macerich will retain a 5% interest in the joint venture.
Paradise Valley Mall, which was built in 1978 and sits on a 92-acre parcel, has been rezoned to “better reflect local demand for a wider mix of offerings,” according to Macerich.
The renovated property will include high-end grocery, restaurants, 3.25 million square feet of multifamily residences, offices and retail.
“As the retail landscape continues to evolve here in Arizona and around the country, our decision to realize the market value of this noncore asset makes sense for Macerich,” President Ed Coppola said in a statement.
“Our focus remains on Macerich’s top-tier, market-dominant properties that will continue to benefit from the industry’s increasing momentum toward high-quality destinations,” he added.
Macerich owns 50 million square feet of real estate, primarily spread across 47 regional shopping centers, including Santa Monica Place, Los Cerritos Center, Lakewood Center and The Oaks.
Macerich Chief Executive Tom O’Hern said in a statement last month that his team is “strongly encouraged by increasing sales and traffic trends,” across the company’s portfolio of shopping centers, and that he expects “retailers will experience a robust rebound during the summer and second half of 2021.”
“Importantly, we also are experiencing resilient leasing demand, including from a wide variety and breadth of categories and uses, which supports our optimism for occupancy improvement and recovery,” O’Hern added.
The mall operator reported $230 million in losses on $786 million in revenue for 2020, compared to a net income of $96 million and $927 million in revenue for 2019. Its shopping center portfolio’s occupancy rate also dipped to 89.7 % from 94% in 2019.
Macerich said it collected approximately 89% of rents billed during the three months ended Sept. 30 and 93% of rents billed in the fourth quarter of 2020. Collection of January rents was at 89%, according to documents filed with the Securities and Exchange Commission.
