Sternlicht’s Starwood Sells Mall Outside Miami to a Dallas-Based Developer

(Bloomberg) -- Another Starwood Capital Group shopping center has a new owner as Barry Sternlicht's firm continues to whittle down its retail-property holdings.

Centennial, a Dallas-based redevelopment firm, acquired the Westland Mall outside Miami in a deal that includes assumption of Starwood's roughly $149 million mortgage. The property, in Hialeah, is Florida's sixth-largest enclosed shopping center, with almost 100 retailers and restaurants, including Macy's, JCPenney, H&M and Victoria's Secret stores, Centennial said in a statement.

Starwood has been shedding malls, often at a loss, since the Covid-19 pandemic forced many businesses to close and spurred consumers to increase their online shopping. Its retail-property unit lists seven shopping centers on its website, down from 30 before the pandemic. Other mall owners, including Brookfield Asset Management and Simon Property Group, have also surrendered properties to lenders as the prospects for profitability dimmed.

Centennial, whose financial partners include USAA, plans to spend approximately $1 billion over the next 24 to 36 months acquiring malls and redeveloping them by adding apartments, hotels and offices, Chief Operating Officer Whitney Livingston said. The firm oversees 21 shopping centers in nine states with almost 14 million square feet (1.3 million square meters) of space.

“Our investment thesis is that the best real estate in major markets is where malls sit today,” she said in an email. “We don't buy just to be a mall operator. We buy to own bullseye real estate that we can redevelop into dominant mixed-use destinations.”

Representatives for Starwood and Centennial declined to disclose the full financial terms of the deal. Centennial assumes the remaining portion of an original $160 million mortgage Starwood took out on the property in 2017 from Aareal Capital Corp, according to Miami-Dade County property records. The county's property appraiser lists the mall's 2021 market value as $81.9 million.