Hudson Pacific Properties in advanced talks to buy Westside Pavilion: sources

The struggling mall’s current owner, Macerich, said last year it would sell

Feb.February 05, 2018 05:15 PM
Interior of Westside Pavilion with HPP’s Victor Coleman and Macerich’s Art Coppola (Credit: Westsidepavilion)

Hudson Pacific Properties is in advanced discussions to buy the Westside Pavilion shopping center in West Los Angeles, The Real Deal has learned.

Macerich Co. owns the struggling Westside Pavilion, a 755,000-square-foot mall at 10800 W. Pico Boulevard. It intends to stay on as partner following the sale, sources said.

In November, the company announced it planned to sell the property, and had interest from several potential buyers who would seek to rezone and redevelop the site. The mall, which includes a 10-screen movie theater, Bed Bath & Beyond and Victoria’s Secret, is next to the new Expo Line Metro station, in an area ripe for residential development.

GPI Cos. owns the separate 220,000-square-foot Macy’s property — the mall anchor store — and an accompanying 1,550-car parking garage. GPI purchased that property for $50 million in January 2017, and in October, Macy’s said it would shutter the store in a year, part of its plan to close 100 stores nationwide.

HPP, Macerich and GPI did not respond to requests for comments.

Hudson Pacific, a Los Angeles-based REIT, is the nation’s largest independent studio operator and would appear to have little interest in keeping the property a mall. It owns the expanding Sunset Gower, Sunset Las Palmas and the Sunset Bronson studios in Hollywood. The firm also maintains an expansive office portfolio, including the Netflix-leased Icon and Cue in Hollywood and the mixed-use Fourth & Traction project in West L.A. It does not own any malls, according to its website.

Art Coppola, chief executive at Macerich, announced plans to sell the three-story Westside Pavilion during an earnings call in November. A $142 million CMBS loan attached to the mall had been transferred to special servicing three months before that.

Macerich had contemplated giving the property a makeover, and said it was “in the planning process” in March 2016. That never happened. It was also considering tearing away the fortress-type walls that surround the 1970s mall, and opening its ground-level stores to Pico Boulevard pedestrians. That, also, never happened.

In addition to low occupancy rates and slow sales, Westside Pavilion sustained a major blow with the Macy’s announced closing. Nordstrom, another major retailer, also left.

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