Citadel Strikes a Deal With Craig Realty Group

Newport Beach, Calif.–based outlet-mall developer Craig Realty Group has struck a deal with the city of Commerce, Calif., to purchase the Citadel Outlets retail center and office park for $53 million.

Craig Realty—which owns outlet centers in California, Oregon, Arizona and New Jersey—intends to pump $30 million into renovating the Citadel. The realty group plans to add 126,000 square feet of retail space to the center after it closes on the purchase in July.

The Citadel is currently 97 percent leased and houses 147,000 square feet of retail space and 256,000 square feet of office space. Tenants include Quiksilver, BCBGMaxAzria, Benetton, Eddie Bauer, Ann Taylor and Geoffrey Beene. The center is known for its Assyrian-style architecture, which includes a giant wall and a fortress-like setting.

Originally built in the 1920s to house a tire factory, the Citadel endured several changes of ownership before Texas-based developer Trammell Crow Co. turned it into a shopping center and office space in the early 1990s. It became the Los Angeles area’s first outlet center.

Craig Realty Chief Executive Officer Steven L. Craig said the company will not disturb the building’s original architecture but will enhance the structure with more night lighting, signage and detailing.

“We strongly believe in keeping the historical dignity of the wall and office tower and plan on enhancing it by refurbishing, restoring, painting and resealing it,” Craig explained. “We will add several layers of detail and trim to the existing shop fronts that will be reminiscent of the highly decorative style that the original builder, Adolph Schleicher, had in mind.”

The company expects to complete the expansion by next summer. It will build the additional space, which will include 35 new stores, using an open-air shopping format.

Craig Realty has found a niche in managing and developing outlet centers, which generally maintain high occupancy rates and steady traffic because tenants offer goods at 30 to 70 percent off retail prices. The realty group operates Carlsbad Company Stores in Carlsbad, Calif.; Cabazon Outlets near Palm Springs, Calif.; Woodburn Company Stores near Portland, Ore.; and the Outlets at Anthem in Phoenix. In addition, the company manages the Lake Elsinore Outlets in Lake Elsinore, Calif., and is building The Plaza in San Clemente, Calif., and the Sussex Commons Lifestyle Outlets in Frankford Township, N.J.