Rouse’s California Cravings Grow with $170M Asset

By Barbra Murray, Contributing Editor

Andrew Silberfein, Rouse Properties

Still in a California state of mind, Rouse Properties Inc. has added a new Golden State asset to its portfolio. The REIT recently wrapped up the acquisition of the 1.1 million-square-foot Westfield Carlsbad in Carlsbad, Calif., in a $170 million transaction with seller Westfield.

Rouse financed the purchase of the San Diego-area asset with the issuance of $140 million of preferred operating partnership units and $30 million in cash. The REIT has renamed the 46-year-old regional mall The Shoppes at Carlsbad, but that’s not where the changes will end. In addition to rebranding the property, Rouse will reboot a $300 million renovation project, the first phase of which Westfield completed in 2014. Ultimately, the enclosed mall will be transformed into an open-air shopping and dining destination.

“We see a tremendous opportunity to apply our entrepreneurial national platform to reposition the property. As we move forward with this process, we will work in close coordination with City officials to ensure we deliver a product and retail experience that is unique for the marketplace and that the families in the community can be proud of,” Andrew Silberfein, president & CEO of Rouse, said in a prepared statement.

Rouse has been keen on California of late. The company purchased the 301,500-square-foot Fig Garden Village in Fresno for $106.1 million in June, and snapped up the 521,000-square-foot Mt. Shasta Mall in Redding for $49 million in February. However, there’s no tunnel vision here. During Rouse’s third quarter earnings call in October, Silberfein said, “I think if you look at really some of the areas of our focus, it’s not only California, which is an amazing state, but it’s also the Southeast, it’s also the East Coast. So those are really the areas that we’ve been pretty active on the acquisition front and I think that pattern will persist for a while.”