Taubman Debuts $500M Makeover of LA’s Beverly Center
- Nov 06, 2018
Taubman Centers, owner of the 886,000-square-foot Beverly Center in Los Angeles, has officially reintroduced the iconic shopping center following a $500 million reimagination. The REIT kept the doors of the upscale super-regional mall open during the three-phased renovation.
“When we conceived this project, which began in April 2016, we had several significant goals…. Fast forward 30 months later, and I believe we’ve checked every box,” Robert Taubman, chairman & CEO of Taubman Centers Inc., said during the company’s third quarter 2018 earnings conference call on Oct. 30.
Beverly Center has loomed large on the edge of Beverly Hills at 8500 Beverly Blvd. since 1982, when Taubman co-developed the 8-acre property at a cost of roughly $200.9 million. In 2004, the REIT became sole owner with the $11 million acquisition of the remaining 30 percent stake in the prominent corner shopping center. A dozen years and a series of improvements later, Taubman conceived a grand plan for the comprehensive modernization of the interior and exterior of the eight-story retail destination and tapped Italian architectural firm Studio Fuksas to spearhead the new design.
More star power
The aforementioned boxes on Taubman’s list for the reimagination of Beverly Center included the incorporation of natural light via expanded floor openings and a 25,000-square-foot, curved-glass skylight ribbon. The plan also called for a new court gathering space and a cutting-edge parking system to enhance driver use of the 3,000-space, four-story garage. Perhaps the most notable upgrade involved the creation of destination dining by exposing the ground level of the property to the street for easy access to a roster of nine restaurants.
Additionally, Taubman Centers re-curated the retail offerings at Beverly Center by adding new shops and expanding others. This year, Balenciaga opened a nearly 2,000-square-foot store, Polo Ralph Lauren signed on for 2,300 square feet and fashion retailer Zara opened in a 28,300-square-foot space.
“[The upgrades were] all with the intention of making Beverly Center, which was a top 50 asset, but facing significant challenges, into one of the top 10 assets in the country,” Taubman said during the conference call. Something’s working. In the third quarter, there was a double-digit increase in quarter-over-quarter sales per square-foot, laying the groundwork for 2018 annual sales to reach historic levels.
The state of the mall
Mall vacancies continue on the upswing in the U.S. According to a report by commercial real estate data provider Reis Inc., the vacancy rate reached 9.1 percent in the third quarter of 2018, compared to 8.3 percent during the same period in 2017, due in part to increasing Sears store closures. However, it’s a different story for well-located upscale malls, where Macy’s, Bloomingdales and the like occupy anchor spaces. “Our data shows that high-end malls in better locations are thriving while those in weaker areas are seeing decline,” per the report.
Taubman, which describes itself as having the industry’s premier portfolio, is capitalizing on the favorable trends in the high-end mall segment with a major upgrade at one of its other properties. The REIT is in the midst of a $200 million expansion of The Mall at Green Hills in Nashville, which is considered the dominant luxury and fashion destination in Tennessee. The 850,000-square-foot property will increase in size by 170,000 square feet.
Images courtesy of Jeremy Samuelson