After years of deliberation, Paris-based Unibail-Rodamco-Westfield has decided it isn't breaking up with its U.S. mall business after all.
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In 2022, the European multinational commercial real estate company said it would sell its $13.2B U.S. portfolio by 2023 due to financial struggles, activist investor pressure and the impact of the pandemic. But as time went on, its divestment slowed. In its fourth-quarter earnings release on Thursday, the company confirmed it had changed course.
“We have made the strategic decision to retain our high performing Flagship assets in the US, which will deliver further growth and value creation,” URW CEO Jean-Marie Tritant said in a statement.
Over the last four years, URW took actions to reshape its portfolio, disposing of roughly $6.6B of properties in Europe and the U.S.
In the U.S. specifically, the report states that the company has sold or lost 17 properties, bringing in approximately $3.3B and reducing the vacancy rate of its flagship malls by 6.3%.
URW said it plans to retain its 11 flagship U.S. malls but still continue selling off its non-core assets and reducing its debt. It reported four non-flagship U.S. malls on its list of assets as of Dec. 31, calling out regional malls near Washington, D.C., San Francisco, San Diego and Los Angeles.
More plans for growth are expected to be announced in May.
Signs of URW second-guessing its exit of the U.S. market emerged in March as the retail market began to recover, as 16 of the malls URW still held in 2024 started to regain value. Industry experts said at the time the company would be better off retaining its top-performing assets.
In October, it signaled it plans to stick around when it landed an extension for its $350M loan for the Westfield Montgomery mall in Bethesda, Maryland, a suburb of Washington, Bisnow previously reported. The extension came after the loan was transferred into special servicing in April and a new valuation cut its property value nearly in half from a decade ago.
URW disclosed Thursday it bought its partner's 50% equity stake in the 1.3M SF property, consolidating its ownership as it plans a redevelopment.
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