Richmond's Hilltop Mall rebranded as potential life sciences space as owner seeks to sell
An aerial view of the former Hilltop Mall, now rebranded as the East Bay Science and Technology Center under new plans by the owner to sell or lease the property.
By Laura Waxmann – Staff Reporter, San Francisco Business Times
Aug 21, 2020, 5:01pm PDT Updated Aug 21, 2020, 5:23pm PDT
The Covid-19 pandemic has caused a Southern California developer to change course on plans to redevelop Richmond's aging 1.3 million-square-foot Hilltop Mall.
Newport Beach-based LBG Real Estate Cos. has rebranded the 78-acre property on Hilltop Drive at the I-80 freeway as the East Bay Science and Technology Center and is now looking to offload the asset, pitching it as a new potential center for life sciences and biotech space. The former mall is entitled for close to 17 million square feet of building area and zoned for hotel and residential uses.
LBG Managing Partner Doug Beiswenger told me the firm is currently “gauging market interest” and hasn't set an asking price. Newmark Knight Frank is marketing the site.
The property comprises six buildings and 6,000 parking spaces. LBG initially purchased a portion of the property — an enclosed mall and another building that was home to a department store — in 2017 for $24 million. The company later acquired the balance of the land and other buildings.
At the time of purchase, the property was 50% occupied, but the Covid-19 pandemic has caused most of its retail tenants to exit.
Now, the property is only around 16% occupied, with Walmart as the only remaining tenant, according to Beiswenger, who described the property as “a blank slate and irreplaceable piece of real estate.”
Originally, LBG had planned to renovate the property and to "put in a replacement mall with some office," said Beiswenger. As we reported previously, the aging shopping center was in dire need of an overhaul. The company even rebranded it as the Shops at Hilltop.
Hilltop Mall in Richmond "has been starved for attention," said Leslie Lundin, managing partner for Los Angeles-based LBG, one of the mall's new owners.
But due to a changing retail market, those plans never materialized, and LBG has not undertaken any capital improvements at the site.
"When Covid happened that of course dramatically accelerated the reduction and need for retail space and the increase in need for life science, biotech and office space in East Bay locations," said Beiswenger. "Therefore our plan has just continued to evolve as the market has evolved, most recently with Covid in a very accelerated manner."
Beiswenger said the firm is willing to sell or lease the property “in whole or in part,” and that its large floor plates could serve a variety of uses, including life sciences and biotech labs, office, hotel, retail and residential. The property is entitled for up to 9,700 residential units.
“We could end up with a developer that wants to do a high-density mixed-use, a complete, fully walkable community,” he said. “One of the big benefits of its accessibility and the confirmation of what the property is in today’s Covid and hopefully soon post-Covid environment is that it being mostly two story, the vertical transportation needs are very little.”
While many commercial buyers are holding off on deals as a result of the pandemic, the life sciences space continues to be a top performing sector in the Bay Area, with 2.1 million square feet of active tenant demand outpacing the 1.7 million square feet of available space, according to Newmark. The market’s vacancy rate across the Bay Area is currently at 5.6%.
For more on the history of Hilltop, click here.