Malibu Lumber Yard Mall Sold for $35.5 Million
The exclusive Malibu Lumber Yard retail center in Malibu, Calif., has a new owner.
The Malibu City Council unanimously (5–0) approved June 11 the sale of the Malibu Lumber Yard, which was opened on city land in 2009. It was developed for $25 million by Malibu Lumber LLC, which was led by entrepreneur Richard Weintraub.
Columbus, Ohio–based real estate investment trust Glimcher Realty Trust acquired the leasehold interest for $35.5 million. Glimcher expected to fund the acquisition through its corporate credit facility. The transaction is expected to close by the end of the month, said Michael P. Glimcher, chairman and chief executive officer of the REIT.
“The Malibu Lumber Yard is an attractive asset due to the exceptional tenant mix, sales productivity and one-of-a-kind location. The retail property offers high productivity in excess of $1,000 per square foot and outsized (net operating income) growth potential as we stabilize the occupancy of the center,” Glimcher said in a statement.
The Malibu Lumber Yard is a two-story, 31,441-square-foot specialty retail center located across the street from the Pacific Ocean. Its high-profile tenants include Kitson, Tory Burch and Intermix. It also is the address of the second location of pioneering boutique Maxfield, as well as the beach flagship store for the James Perse brand. It is 84 percent leased.
Glimcher runs 27 malls throughout the United States. Currently, it owns two malls in California, the Puente Hills Mall in the City of Industry and Weberstown Mall in Stockton. Glimcher also runs lifestyle center Scottsdale Quarter in Scottsdale, Ariz. Scottsdale Quarter opened in 2009, and it hosts retailers such as Industrie Denim, a collaboration between Levi Strauss & Co. and Mark Werts, the pioneering Los Angeles–based retailer who built American Rag Cie.
Malibu Lumber LLC had been looking to sell its lease on the mall land for more than one year. News reports quoted Weintraub as saying that he and business partner Richard Sperber believe their investment in the property had cost more than they had expected because of unique aspects of the deal, such as constructing a wastewater-treatment system for the mall.
Glimcher will also keep Weintraub’s rent deal with the city of Malibu. Malibu Lumber Yard will pay $925,000 in base rent, which will increase 5 percent every five years. When the site’s rents exceed $2.2 million, the city will receive 30 percent of the total rent.
Mall neighbor Jay Luchs did not expect much of a change with the new owners. “The people who developed had their day, and it was time to sell,” Luchs said. “There is not much to change, if anything, on the ground floor.” Luchs served as the Malibu Lumber Yard’s leasing agent from 2006, when it was just a dirt parcel, to 2011.
Luchs is an executive vice president with real estate company CBRE and also is a partner with the Malibu Village retail center, a neighbor of the Malibu Lumber Yard. The Malibu Village’s tenants include boutiques for fashion houses Missoni and Lanvin, as well as a Nike-owned boutique called Salvation. The Lumber Yard is located adjacent to the Malibu Country Mart retail center, home to exclusive shops such as Ralph Lauren, M. Fredric and John Varvatos.
Because the Malibu Lumber Yard was built on city land, part of the civic agreement to develop the area was to offer deals to small Malibu businesses so they can afford rent at the Malibu Lumber Yard. Currently, a small handful of Malibu businesses, such as dance school Miss Charissa’s Dance Star, claim an address at the Lumber Yard. Former Malibu Mayor Jefferson Wagner criticized Weintraub for the lack of Malibu-based businesses.
“I was hoping for better, real local businesses, “Wagner said. “I realize that they are entitled to make a buck, but at what point is the money enough, and what point can you show that you are giving back?” Wagner served as Malibu mayor in 2010 and served as a councilmember from 2008 to this year, when he chose not to run for re-election. Wagner also runs the Zuma Jay surf shop.
Weintraub is currently developing plans for a 146-room luxury hotel called Rancho Malibu Hotel on a site that overlooks the Malibu Pier.—Andrew Asch
