The owner of one of San Diego’s premier luxury shopping destinations is doubling down on the mall’s A-list retail reputation with a refashioned redevelopment plan centered around adding more shops and restaurants.
Simon Property Group has applied for permits from the city of San Diego to redo the west end of Fashion Valley mall with 240,000 square feet of storefronts and around 400 high-end residential units. The retail element will replace the mall’s JCPenney anchor and its west-facing parking lot, whereas the residential component will take the place of the Firestone Auto Center and surrounding surface parking areas.
“The main thrust of (the plan is) retail and food and beverage, which I’m viewing as a mall expansion,” Stephen Shea, vice president of development at Simon Property Group, told the Union-Tribune. “What we have there today does exceptionally well. It’s beautiful. It performs. So we’re going to continue through what was the Penney’s parcel with a two-level, open-air mall expansion that goes all the way out to Fashion Valley Road.”
Simon is seeking a neighborhood development permit, which requires approval at the staff level. The permitting process is expected to be completed by the spring of 2027, with initial building demolition to start next summer, Shea said. The mall expansion project will take around a year to complete. Simon, in partnership with AMLI Residential, will then start vertical construction on the luxury apartments.
Opened in 1969 and expanded in 1981, Fashion Valley at 7007 Friars Road in Mission Valley sits on nearly 81 acres and includes 1.7 million square feet of retail space. The mall is owned by Simon Property Group, a publicly traded real estate investment trust, and Prime Property Fund, a real estate investment fund managed by Morgan Stanley Real Estate. The Nordstrom and Neiman Marcus parcels are separately owned.
The mall owner acquired JCPenney’s 17-acre parcel at Fashion Valley after previously forming a joint venture with Brookfield Property Group to buy the company’s retail business through bankruptcy proceedings.
Simon will repurpose the JCPenney footprint for its retail expansion, demolishing the bulky anchor to make room for five buildings that will open up to a large, interior open-air plaza where mall-goers can hang out. The expansion is also designed to be more outward-facing with large restaurant spaces oriented toward parking lots. The new mall space will include pedestrian paseos, and valet and rideshare drop-off areas, Shea said.
The project’s five-story apartment buildings, located at the northwest corner of the site, will be built atop two-stories of parking, and feature a pool deck and other upscale amenities.
Simon’s latest retail-centric redevelopment plan is a shift from the company’s previously stated intent to build 850 apartments and a smaller retail addition on the JCPenney parcel. The mall owner pivoted after hearing from current and prospective tenants who wanted more space.
“Our phone started ringing off the hook with tenants who wanted more space than we could provide,” Shea said. “There are a lot of retailers that just absolutely crank at the center and want to have more space to do their flagship offerings. … And then a lot of the new-to-market tenants who are very selective about where they go are much happier to be in this highly amenitized village concept here. So this was primarily a response to the overwhelming retail and food and beverage demand that just couldn’t be accommodated in the original (plan).”
Simon Property Group
A rendering of the residential units that Simon Property Group is planning to build, in partnership with AMLI Residential, at Fashion Valley mall. The rendering shows the primary entry lobby. (Simon Property Group)
Simon’s change in direction is in line with market trends, said real estate analyst Gary London.
“It’s indicative of a resurgence in retail across the nation,” said London, principal at London Group Realty Advisors. “Where a lot of people went to the extreme in the physical retailing versus online retailing competitive world was that consumers would shift their purchases to online. Those prognosticators completely forgot the experiential aspect of retail. Retail is a form of play. People like to go to the mall. They like to shop and visit and touch and interact with each other and all that.”
London likened the Fashion Valley redevelopment to the substantial upgrades at Westfield UTC, where the addition of trendy eateries, tailored experiences and a residential tower have turned the mall into a new downtown of sorts.
“You don’t have to go there to shop. It replaces downtown, or the old definition of downtown,” he said.
Simon Property Group declined to share the project cost, although Shea characterized the redevelopment as a “significant investment.” Simon has an ownership stake in 212 malls and other retail properties in the U.S. The company said in a recent regulatory filing that it is spending $1.2 billion on new development, redevelopment and expansion projects currently under construction.
JCPenney will remain open for the time being. Shea said the mall owner wants to keep the department store in operation for as long as possible.
