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Monday, Jan 30, 2023
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Loss of Anchor Unmoors Mall

Tumbleweeds aren’t blowing through the Westfield Promenade mall, but it’s clear the shopping center’s best days are in the past. On a recent afternoon there were no excited shoppers hustling from store to store, no hum of conversation or jingling of cash registers. And the Woodland Hills mall appeared to be almost a third vacant, a figure that will more than double with the announcement last month that two anchors, a department store and furniture gallery owned by Macy’s Inc., will close. The Promenade, at 6100 Topanga Canyon Boulevard, has been a part of the Valley retail market for four decades. But now the 637,000-square-foot mall is the weak link in owner Westfield Corp.’s $350 million Village at Topanga, a 550,000-square-foot outdoor mall under construction that will connect the Promenade and the nearby Westfield Topanga center. With the closure of the two Macy’s outlets – which together represent a 270,000-square-foot hole in the floorplan – and many of the tenants on month-to-month leases, some real estate professionals are speculating about the future of the Promenade. “You just can’t tear it down and put up whatever you want,” said Martin Lipkin, Warner Center Neighborhood Council member. “Every (tenant) of any notice has left the mall and the prospects of bringing a major retailer in are pretty slim.” Lipkin, vice president of the neighborhood’s Planning Land Use and Mobility Committee, said he wouldn’t be surprised if Westfield attempts to sell it to a residential developer. “Right now they’re (Westfield) being sniffed around by a lot of residential developers because nobody wants to do commercial,” he said. Though Westfield, a Century City-based mall developer, has remained tight-lipped regarding specific plans for the Promenade, it’s safe to say the company has ideas. “A group like Westfield, they’re probably prepared for everything,” said Todd Nathanson, president of illi Commercial Real Estate in Encino. “The chances of them ever being caught off guard are very slim.” At-risk tenants The closing of Macy’s has left many tenants unnerved. Westfield’s only communication on the Promenade doesn’t indicate whether new tenants, an upgrade or a complete redevelopment are in the cards. “Westfield has a strong track record of recovering and reorienting former department store real estate,” the company said in a statement. “We view this departure as an opportunity to do so at the Promenade.” Currently, there are but a handful of tenants drawing traffic to the mall, including the AMC Theater, Maggiano’s Little Italy restaurant and Ruth’s Chris Steak House, all of which are located along the perimeter. Inside, only small boutiques and specialty shops remain, and many have seen their sales decline along with the mall’s foot traffic. Most of these tenants have month-to-month leases. To date, there are roughly 20 remaining shops at the Promenade, three on the first level and the remainder on the second. “Slowly but surely, leases are not being extended (and) they’re not telling the tenants anything,” said Yvette Berke, co-founder of animal adoption agency Petopia, a mall tenant. “Either they’re going to tear it down or remodel.” When the non-profit organization’s two-year lease ended last year, Westfield decided not to renew. Petopia was given a six-month extension to find another location and must leave the Promenade in March, after investing $100,000 in improvements. “We thought we’d be here for years,” said co-founder Debra Regal. “When we first came, their concept was that this would be a family-type mall. But then we began to notice that people would leave and (nobody would fill the space). By 2013 we knew, ‘Uh oh, something is not right.’” Several other tenants said they also believe something is in the works, but have yet to hear a definite answer from Westfield. Also there is a land ownership issue that might restrict future changes. The 81,000-square-foot box being vacated by the furniture gallery is owned by Cincinnati-based Macy’s. And the property currently leased by AMC Theaters is owned by EPT Down REIT II Inc., a real estate investment firm in Kansas City, Mo. that owns the land under several AMC multiplexes. Macy’s still has a store at the Westfield Topanga mall, so Lipkin believes it probably won’t sell its land to another department store chain. “Macy’s has hung onto that land because they didn’t want any other major retailer moving in,” he said. “I don’t think Macy’s would like to see the expansion of another competitor store, (especially) right across the way.” Matthew May of May Reality Advisors in Sherman Oaks said that even though Westfield doesn’t own the two large boxes, they still have options within the context of the Village at Topanga project. “When you look at how a mall is designed, it has anchors on each side and smaller stores in between. (Westfield) has the chance to do this at the multi-dimensional level – two malls on each side and several stores in between,” he said. “The Promenade is very dated and the tenants there are overlapping between Woodland Hills and Topanga. They need to recapture that space and repurpose all of it.” Smaller malls Uncertainty at the Promenade comes at a time when the entire mall industry is shrinking. Smaller, older shopping centers are closing throughout the country under the pressure of larger upscale competitors and ecommerce sales. “Success in malls is bifurcating. The ‘A’ malls are doing extremely well, driven by high profile and high productivity tenants like Apple, Nordstrom, Sephora and Tesla,” said Neil Stern, senior partner of McMillanDoolittle LLP., a retail consultancy in New York. “But ecommerce is changing everything. It still represents only about 7 percent of total sales, but it is severely impacting the growth in many categories, including apparel, a mall staple.” In addition to the two Macy’s closures, Westfield took a hit at its Topanga mall earlier this year when Sears Holdings Corp. announced it was leaving its 160,000-square-foot store, which will result in the loss of a primary anchor for the 51-year-old center. However, Sears is but one of several anchors at the Westfield Topanga at 6600 Topanga Canyon Blvd. The other large stores at the 1.58 million-square-foot mall include a Macy’s, Nordstrom, Nieman Marcus and Target. Still, Westfield Topanga draws strong traffic, which is more than can be said about the older and smaller Promenade. West Hills resident Michael Garetti said he used to be an avid shopper at the Westfield Promenade, and he still visits from time to time. “I’m rather disappointed that Macy’s is going (because) there are no other shops here to keep me coming,” said Garetti, on a recent visit to the mall. “All the closings are disturbing. I’ve always liked this mall but it’s become more of a ghost town.”

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