By Meghan Hall
After being placed on the market in late summer of 2020, Richmond’s Hilltop Mall has traded hands. In a deal that recently closed, LBG Real Estate Companies sold the asset for about $117 million. The buyer of the property is logistics giant Prologis.
Since acquiring the property in 2017 for $23.75 million, LBG had been planning a massive overhaul of the 1.3 million square foot, 77-acre asset. The firm’s plans had included 9,600 residential units as well as 16.7 million square feet of retail, residential, hotel and medical uses. The first phases of the repositioning were originally scheduled to get underway at the end of 2020 and beginning of 2021.
According to The Registry’s previous reporting, LBG placed the asset on the market in direct response to challenges posed the COVID-19 pandemic. The mall is currently only about 15 percent leased, and while Walmart remains operational, the center’s Macy closed earlier this year. LBG and Newmark, who was marketing the property for sale, pitched the asset as a “blank slate” for interested developers and those in the life sciences and biomedical industries, where growth continued despite the pandemic.
“The reason that we’ve adjusted our business plan is really in response to the COVID-19 pandemic and changes in demand,” explained Doug Beiswenger, founding partner at LBG Real Estate Companies, when the asset initially hit the market. “There is a very significant change in demand in the life science and biotech; needless to see there is expected to be a tremendous amount of growth in that space because of the pandemic and other reasons…”
Newmark declined to comment when contacted for this story.
As LBG seeks other opportunities, it is confident in Prologis’ vision for the site.
“LBG will continue to seek to acquire similar opportunities for adaptive reuse and redevelopment, and is actively doing so at this time,” said Beiswenger in an updated statement to this news organization. “Prologis is a fantastic company, has been great to work with, and we are quite certain will do a remarkable job redeveloping the property.”
While plans are still forming, Prologis hopes that its project will be a unique opportunity for both the company and wider city of Richmond.
“The acquisition of the Hilltop Mall marks the beginning of our efforts to pursue a mixed use development that includes residential, retail, and modern logistics facilities, which will spur further reinvestment, job growth, and economic opportunity,” the company said in a prepared statement. “We are excited to make this investment in the community and are deeply committed to working with the City of Richmond and residents to promote the revitalization of the Hilltop area.”
In the interim, City officials were considering utilizing some of the property’s acreage as a “Safe Park,” where RVs could be parked as housing for the homeless. The City had initially pitched parking between 20 to 100 RVs at the property; however, strong opposition by locals ultimately led the Council to vote against the arrangement.
San Francisco-based Prologis is one of the largest owners and operators of logistics real estate in the world. As of the end of the first quarter, the company had owned or had investments in 990 million square feet of space in 19 different countries. Within the Bay Area, a few of Prologis’ assets include Prologis Oakland 7, a 336,680 square foot warehouse, Prologis SFO 20, a roughly 89,000 square foot asset used for distribution, and Prologis Livermore 7, a 77,318 square foot warehouse and advanced manufacturing facility.