Lakewood Center, a sprawling Los Angeles mall built in 1951 to bring commerce to the region’s growing suburbs, is about to be reimagined after its near-record sale.
Retail landlord Macerich sold the 2 million-square-foot mall for $332.1 million to a joint venture composed of three developers and investors.
The sale — among the priciest retail transactions in years for the county — sets the stage for a sweeping redevelopment of one of the region’s largest and most-trafficked, yet outdated, shopping centers into a mixed-use hub blending retail, residential, dining and open space. The mall is considered by the Los Angeles Conservancy to be a historic property; it opened as the center of business for Lakewood, a fast-growing community during World War II when, as the conservancy put it, “developers all over Los Angeles scrambled to create new housing for the massive influx of people.”
The trio of new owners are the redevelopment leader Pacific Retail, which specializes in repositioning underperforming retail assets; Lyon Living, which is set to integrate housing and lifestyle components; and Silverpeak, which will provide investment capital and strategic guidance.
“The Lakewood Center is more than a shopping destination — it’s a landmark of postwar development and a symbol of how retail can evolve,” said a statement from Steve Plenge, CEO of Pacific Retail Capital Partners, a firm known for turning old malls into mixed-use. “Our vision is to honor that heritage while transforming it into a next-generation mixed-use destination.”
Shopping center owners across the country are replacing underused retail space — from big box spaces to parking lots — with apartments, dining and open space to spur foot traffic and sales.
The new owners have not disclosed specific construction phasing, but projects of this scale typically unfold over several years and require extensive community consultation, entitlements and environmental review.
The property’s size and central location, however, make it one of the few mall redevelopment opportunities in Los Angeles County capable of creating a new, large-scale mixed-use district, local brokers say.
Mall’s value slashed from 2015 levels
The nearly 150-acre property, located in the city of Lakewood in southeast Los Angeles County, has long been a cornerstone of local commerce. Anchored by Costco, Target, Macy’s and Home Depot, the 89% occupied center generates about $343 in sales per square foot, placing it in the middle tier of malls around the country, according to local brokers.
The mall is facing significant headwinds as a result of shifting shopping behaviors. Forever 21’s bankruptcy and exit from the U.S. market added a vacancy, while uncertainty around JCPenney and Starlight Cinemas — both with 2025 lease expirations — puts nearly a fifth of the property’s rent at risk.
In a May review of a CMBS loan backed by the property, credit agency S&P Global Ratings slashed its valuation of the mall by 55%, to $280 million, from its initial value of $630 million in 2015.
Macerich purchased the mall in 1975 for $160.1 million; it sold a 40% interest in 2015 before buying that portion back in 2024 in a deal with GIC Real Estate, records indicate. Last year, the retail property became subject to two CMBS loans totaling $410 million originated by Deutsche Bank, with Wilmington Trust serving as trustee. Both notes are due to mature in January 2026.
The latest deal contributes to an 8% uptick in retail property sales across Los Angeles in the past year to $3.3 billion, according to CoStar data. The average retail vacancy rate is hovering around 6%, while new retail construction is down 13% year-over-year to 601,000 square feet.
Decades of trends
Lakewood Center has evolved from its debut as one of the nation’s first open-air suburban shopping “cities” into a hybrid property that blends enclosed and outdoor space.
The mall was built to serve the master-planned community of Lakewood, which added more than 17,000 homes in under three years fueled by explosive postwar suburban growth.
Developers enclosed the core of the mall in 1978, following national trends, but later renovations added wings and plazas that reintroduced the feel of open promenades.
Today, the property reflects both its midcentury roots and later reinventions, with enclosed anchors like Macy’s and JCPenney alongside outdoor-style retail.
The property’s 150 acres gives the new owners unusual flexibility to add uses such as housing and outdoor gathering areas while retaining key national retailers.
New owners count redevelopment experience
The redevelopment comes at a time when mall owners across the country are rethinking enclosed shopping centers as e-commerce has siphoned consumer spending. Shoppers are still visiting malls, but doing so more often when those malls offer options to complement traditional stores, from food halls to escape rooms.
In one recent example, Walmart acquired the Monroeville Mall in Pennsylvania, near Pittsburgh, and has tapped Dallas-based Cypress Equities to manage a redevelopment that could include demolishing all or part of the property or adding new uses such as housing.
Los Angeles-based Pacific Retail Capital Partners has a track record of repositioning distressed or aging malls. The company is redeveloping the former Carson’s anchor store at Yorktown Center in Lombard, Illinois, into a mixed-use community with about 600 apartments, new retail and dining and a central green space called The Square. It’s also converting the 43-year-old White Plains Galleria in White Plains, New York, into a mixed-use district.
Meanwhile, partner Lyon Living, based in Newport Beach, California, has focused on integrating housing and lifestyle elements into large-scale projects. New York City-based Silverpeak brings investment capital and development experience in retail and multifamily.
The sale leaves Santa Monica-based real estate investment trust Macerich with a cleaner balance sheet and a significantly smaller portfolio in the region, Jackson Hsieh, president and CEO, said on the firm’s August 11 earnings call.
As part of an effort to unload underperforming properties, the company sold The Oaks in Thousand Oaks for $120 million, and its Santa Monica Place is in receivership.
It will focus on its remaining Los Angeles area property, Los Cerritos Center, which is “doing gangbusters right now. Lots of traffic, lots of sales, lots of tenant demand,” and the landlord is working on bringing new anchors to the mall’s former Sears and Forever 21 anchor stores, Hsieh said during the earnings call.
Macerich bought its partner’s stake in a portfolio that includes Los Cerritos earlier this year.