By JENNIFER VAN GROVEOCT. 15, 20185:25 PM
A big box no more, the space formerly occupied by Sears at Westfield UTC is being repurposed as a 226,200 square-foot, mixed-use center with retail, restaurants, entertainment and creative office.
Called The Collection at UTC, the under-construction development is the brainchild of Seritage Growth Properties and Invesco Real Estate, which together own the 12-acre Sears parcel that includes the auto center. The idea is to create an eat-work-play environment, extending the hip atmosphere of the rest of the revamped mall through the east end.
When it opens late next year, The Collection at UTC will house 20 to 25 premier tenants in a three-story north building and a two-story south building, separated by a new, open-air corridor, said Mary Rottler, the executive vice president of leasing and operations at Seritage. The Collection has been in the works for years — well before Sears Monday filed for bankruptcy protection and announced it would close 142 under performing stores, none of which are in San Diego.
Last week, posh health club Equinox debuted as the first announced tenant of The Collection at UTC. The elite gym, which operates just one other location in the county, is taking 33,000 square feet at the new development — or the entirety of the third floor in the north building. Otherwise, Seritage is in active discussions with a variety of potential local and national entertainment venues and restaurants, along with health and wellness and other boutique retailers, Rottler said.
Though attached to the mall, the development is distinct from Westfield UTC and the center’s years-long transformation. The land under the old Sears store is owned by Seritage, a publicly traded real-estate investment trust; and Invesco Real Estate, a subsidiary of publicly traded Invesco Ltd.
Seritage is, in a sense, the Sears model flipped inside out. The firm was spun out of Sears in 2015 when it bought up the retailer’s stake in more than 250 brick-and-mortar storefronts for $2.7 billion, thus freeing up cash for the beleaguered brand. Sears CEO Edward Lampert is chairman of the trust, which also leased back most of the properties it bought to Sears and Kmart brands.
The REIT also maintains the rights to reclaim stores — as in those sitting on hot property — for redevelopment. That is what happened with the University City Sears, which remained opened until 2017. Seritage, however, started the entitlement process for reusing the land shortly after it took over in 2015, Rottler said. The venue was particularly attractive to the firm because of its La Jolla-adjacent location and Westfield’s financial investment in the attached mall.
In May of this year, Seritage sold a 50 percent interest of the property to Invesco Real Estate. The sale valued the The Collection at $165 million, including ongoing project costs. Construction commenced shortly thereafter.
Separately, Westfield debuted its first major overhaul to UTC in 2012 with a $180-million makeover that included ArcLight Cinemas and a revamped food court. This year, mall-goers witnessed the fruits of the second phase: A $600 million expansion that also introduced a bevy of unconventional food and beverage options. And last year, the mall operator, now owned by Unibail-Rodamco, broke ground on a $200 million residential building at the corner of Nobel Drive and Lombard Place.