JLL Capital Markets has facilitated an off-market sale of White Oaks Mall, a 700,000-square-foot enclosed mall in London, Ontario.
The property has been purchased by London-based Westdell Development Corporation from an institutional vendor.
“Westdell has exciting plans for the commercial centre, including a new facade, new retailers, new commercial retail units on the property, creating a live work play and shop community,” said Iyman Meddoui, President, Westdell Development Corporation, in a statement.
“JLL approached us with this opportunity and was instrumental in putting the deal together and working through the many stages of the process to get it closed.”
Opened in 1973, White Oaks Mall has become one of the largest retail destinations in London. Hosting 180 stores and services, the enclosed mall has survived through the rise of giant e-commerce companies over the years as well as the downturn caused by the COVID-19 pandemic.
“We were giving a market update to the vendor to discuss where we felt the market was at in terms of appetite and buyer pool for different classes of retail and that evolved over several months into a discussion around White Oaks. The mall was never officially for sale but having already worked with Iyman Meddoui as a seller or a buyer in numerous other transactions, we felt he might be interested and knew he’d be the perfect buyer for this asset,” said Nick Macoritto, Executive Vice President, Capital Markets, JLL Canada.
Macoritto said JLL can’t disclose who previously owned the Mall.
“But I can tell you it’s an institutional vendor client of ours,” he said.
Industry insiders told Retail Insider that BentallGreenOak was the seller of the property.
JLL said the buyer pool for large enclosed malls is limited, therefore deep relationships with institutional vendors and private buyers in each market across the country is essential for successful transactions like White Oaks.
Macoritto said JLL has its National Retail Investment Group which sells retail properties coast to coast.
“Enclosed malls in general have historically been owned and operated by large institutions but in order to transact these assets today you really need relationships with private capital because they now represent a large part of the buyer pool for those types of assets,” he said. “This really isn’t a new phenomenon. It’s been the case for about 10 years or so, probably due to private capital having more cash than ever before and partly due the institutional attention having shifted to other asset classes with a more clear path towards income growth.
“Generally speaking, to make a good return on enclosed malls in secondary markets, it’s best if you are locally connected and take a hands-on approach to increasing income . . . Large assets like this are not as liquid as other formats like unenclosed grocery-anchored centres for example which are still equally sought after by both institutional and private capital. Most other large enclosed mall transactions as of late involved either take-back mortgages, income guarantees or a requirement to accept a combination of cash and shares as proceeds. But generally vendors prefer to exit the investment with an all-cash deal and that was the case here too.
“For this asset, for this mall, I think the value proposition that Westdell saw is a combination of really rolling up the sleeves and seeing where can we improve income, can we add tenants, improve leases and some of the terms, can we actually add additional retail square footage in the case of the pads in the parking lot. Iyman has not released any specific plans for the centre but I think that the expectation generally is that he will try to gradually introduce more of a mixed-use aspect to the site. So that could be a bit of office. It could be a bit of multi-residential. We find that’s typical of most of the buyers who are buying assets like this today – enclosed malls. And that’s true whether or not it’s a secondary market. Basically any market. They’re certainly going to try and see it through that lens. It’s not to say that the enclosed mall is suddenly obsolete. There’s certainly a place for that but if you can add value through at least a partial mixed-use component over time then that’s really where these buyers tend to see the reward for their risk.”
