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One of the West Valley’s largest retail centers is up for sale.
Westgate Entertainment District, 6751 N. Sunset Blvd., is on the market for an asking price of $142 million. Jesse Goldsmith, vice president for CBRE, which is brokering the property for current Westgate owner iStar, said he is speaking to potential buyers and anticipates the sale will close around late summer.
“As the West Valley’s premier entertainment and retail hub, Westgate offers investors a tremendous opportunity to acquire one of Arizona’s most significant retail assets,” Mr. said in the April 6 news release announcing the sale.
David Sotolov, executive vice president at iStar and head of West Coast originations chose not to comment on why iStar was selling the property now, saying the company does not comment on assets currently on the market.
Glendale Chamber of Commerce president Robert Heidt said he felt the sale was a sign that the economy is moving in the right direction.
“I think it’s a good indicator in the market and the economy,” he said. “If the current ownership group has made the decision to sell, I think that the market has changed from five, or you know, 10 years ago, so they see opportunity for themselves to capitalize on the current market conditions.”
Mr. Goldsmith and Mr. Heidt each said they were unable to disclose the names of potential buyers, but Mr. Heidt said there are about a half-dozen parties “in serious conversation,” and that the chamber has a relationship with most of them.
“These are not unknown names, these are great household names of entities looking to make the purchase,” he said.
The 46.6-acre Glendale site borders but does not include the city-owned Gila River Arena, Tanger Outlets, Cabela’s and the Renaissance Glendale Hotel & Spa and is near University of Phoenix Stadium, which is on the other side of the arena. The property for sale also includes 30 acres north of the AMC movie theater available for development.
“There’s going to be some multi-family developers that are going to be pretty excited about (the available acres). That’s a possibility, but it’s still just too early to tell,” Mr. Goldsmith said.
At a $142 million asking price, Mr. Heidt said sale would be the largest Glendale has seen at least since he arrived in the city in 2013.
“I think this would be one of the biggest retail assets to ever trade in Arizona,” Mr. Goldsmith said.
This would be the most valuable property Mr. Goldsmith, who works in the Phoenix area for CBRE, has ever sold, but another member on CBRE’s team selling Westgate, executive vice president Philip Vorhees, has sold two California properties at a higher price, according to CBRE’s website.
In addition to brokering the sale, CBRE also handles office leasing in Westgate for iStar, a total of 159,026 square feet of office space. The shopping center is anchored by the 20-screen AMC theater and restaurants Yard House, Dave & Buster’s and Buffalo Wild Wings. In addition to about two dozen restaurants, Westgate includes a handful of retail stores and salons and a comedy club.
This year, Westgate began leasing luxury apartments in the third floor above the center and broke ground last week on a four-story, 100-room hotel. Other new additions include Fine Ash Cigar, restaurants Fat Tuesday and Manna Korean BBQ. A Dutch Bros Coffee opened last month across the street.
The area around Westgate is changing rapidly as well. Topgolf will open at the northwest corner of 99th Avenue and Bethany Home Road in the fall with a rival golf entertainment complex Drive Shack planned to follow with a location across the street. Furniture superstore IKEA plans to open in 2020 at Bethany Home Road and Loop 101, and developers broke ground on a new Desert Diamond casino at the end of 2017.
“The entire area in and around Westgate is a hot box for us right now of activity,” Mr. Heidt said.
Despite a change in ownership, Mr. Goldsmith said business will continue as usual for businesses within Westgate.
“The tenants are doing extremely well and nothing will change in the daily operations out there,” he said. “All the existing leases that are in place will remain the same. It will just be a new property owner. The property’s in great shape. It’s actually probably healthier than it’s ever been. iStar has done an incredible job.”
In a macro sense, Mr. Heidt said he does anticipate change at Westgate, with a new owner bringing in a fresh perspective and perhaps new strategies. He’s optimistic about the type of change that would come, noting that it would be a big investment for whomever buys.
“I would be excited if I owned a business within Westgate or adjacent to it, because again, this is a big number,” Mr. Heidt said. “So, someone that comes in is a serious player and will obviously have some vision around what they want to do to compliment and add to the greatness we already have over there.”
He added that most of the businesses in Westgate are chamber members and the few tenants he’s talked to about the sale are optimistic about it.
Though the chamber has relationships with several of the interested parties, Mr. Heidt said the chamber’s main role will be after a buyer is determined.
“I think our role is not necessarily involved with the sale, but to figure out what this newfound opportunity brings for our community in Glendale and how we can partner with (the new owner) to create that vitality that exists over there at Westgate but also continues to be robust, because that’s a very hot area for us over here in the West Valley,” Mr. Heidt said.
Westgate’s busiest nights usually come when a concert or sporting event are at the arena or stadium. Gila River Arena’s biggest tenant, the Coyotes, have long threatened to move out of Glendale, but have renewed their deal to remain in Gila River Arena for the 2018-19 season, according to a spokeswoman from AEG, which operates the arena and handling contract negotiations with the Coyotes on Glendale’s behalf. The Coyotes did not return a request for comment on how the sale of Westgate might affect the team’s long-term future in Glendale.
Mark Carlisle can be reached at 623-876-2518 or email@example.com.