Hudson Pacific wants full control of Google-leased One Westside; not sweating WeWork

CEO also tells analysts he’s not worried by WeWork’s stumbles

TRD LOS ANGELES /
Oct.October 30, 2019 04:00 PM
Hudson Pacific Properties CEO Victor Coleman and the Westside Pavilion (Credit: Google Maps)
Hudson Pacific Properties CEO Victor Coleman and the Westside Pavilion (Credit: Google Maps)

Hudson Pacific Properties, a real estate investment trust at the forefront of L.A.’s tech revolution, is keen to take full control of a creative office redevelopment sought by Google. If its joint-venture partner is willing to sell its stake, that is.

On a conference call with analysts on Wednesday, Hudson Pacific CEO Victor Coleman confirmed that he’d be open to the possibility of buying out Macerich’s 25 percent stake in One Westside, a former shopping mall that’s being redeveloped into a 584,000-square-foot creative office complex.

Google announced earlier this year that it leased the entirety of the redevelopment, which was formerly known as Westside Pavillion.

“We’d be more than willing to take them out,” said Coleman, noting, however, that no talks are underway and that the shopping mall investor has “been a great partner with us.”

On the call, Coleman also said he wasn’t spooked by WeWork’s sudden and spectacular downfall.

“We are not worried about our exposure in the portfolio,” Coleman said, noting that WeWork leased just 1.5 percent of its rentable office space in L.A., San Francisco, Vancouver and Seattle.

In all, Hudson Pacific inked 550,000 square feet of leases in the third quarter, and posted a 15 percent increase in revenue, the company announced on Wednesday.

More than 2.1 million square feet has been rented year-to-date, with growth drivers in the third quarter primarily coming from two major redevelopment leases in L.A.’s Arts District – Fourth & Traction and the Maxwell Coffee Building.

The Arts District is a revitalizing area that has attracted major tenants like Spotify and Warner Music. Honey, an online company, recently leased the entire 130,000 square foot Fourth and Traction property, once used as a Coca-Cola manufacturing plant. The 1924-built Maxwell Coffee Building at 405 Mateo Street is a five story, 39,000-square-foot creative office property that WeWork has fully leased.

Besides the boost in leasing activity, Hudson Pacific said it made $58.8 million from the sale of its Northern California Campus Center Complex in Milpitas, California, which included three buildings and 35 acres.

On the call, executives said that significant leases totaling more than 198,000 square feet were signed in the San Francisco Bay Area.

As for its studio business, Hudson Pacific reported higher occupancy and rental rates across all of its Hollywood studio properties. Revenue in that segment rose 15.3 percent year-over-year to $22.2 million. While occupancy across all studio properties stood at 92.8 percent, Coleman said on the call that demand remains strong. “There is very little supply today,” he said.

While the company explores other markets for studio space, such as Vancouver, Coleman said the firm’s focus remains in L.A. The company also expects to benefit, either in its office or studio operations, as major streaming services like Netflix and HBO spend billions to ramp up their content, Coleman added.

Hudson, which owns over 3 million square feet of office and studio properties in Hollywood, has leased to video-streaming giant Netflix a 13-story office project called Epic that is set to open in 2020. Hudson owns historic studio lots Sunset Bronson, Sunset Gower and Sunset Las Palmas.


Related Articles

arrow_forward_ios
Aerial photo of the Pacific Design Center (Credit: felixmizioznikov/iStock)

Here’s what WeWork and other tenants pay at 1.4M sf Pacific Design Center

Here’s what WeWork and other tenants pay at 1.4M sf Pacific Design Center
Google CEO Sundar Pichai, and Lendlease’s Denis Hickey

Google reveals plan for 40-acre tech hub in Silicon Valley

Google reveals plan for 40-acre tech hub in Silicon Valley
California Market Center (Credit: Brookfield)

Brookfield lawsuit: Mom-and-pop retailers unfashionably late in paying rent

Brookfield lawsuit: Mom-and-pop retailers unfashionably late in paying rent
Macerich CEO Thomas O'Hern and Santa Monica Place mall

Macerich posts $27M loss; CEO touts physical retail

Macerich posts $27M loss; CEO touts physical retail
Gaw Capital Chairman Goodwin Gaw and DJM founder John Miller with a rendering of the project

An analysis of rent rolls at Hollywood & Highland

An analysis of rent rolls at Hollywood & Highland
Bob Iger, Reed Hastings and (clockwise from top left) Sunset Las Palmas, Sunset Bronson and Sunset Gower Studios (Getty, Google Maps)

Here’s what Netflix, Disney and CBS pay at for their Hollywood digs

Here’s what Netflix, Disney and CBS pay at for their Hollywood digs
Photo illustration of Hudson Pacific Properties CEO Victor Coleman and Blackstone Group President Jonathan Gray (Coleman by Rich Polk/Getty; Gray by Drew Angerer/Getty; Top Gun by Paramount Pictures/Sunset Boulevard/Corbis/Getty)

Inside Hudson Pacific and Blackstone’s field of streams

Inside Hudson Pacific and Blackstone’s field of streams
Hudson Pacific Properties CEO Victor Coleman (Illustration of Victor Coleman by The Real Deal; iStock; Coleman via Hudson Pacific)

Hudson Pacific is effusive about Blackstone deal, defensive about office space

Hudson Pacific is effusive about Blackstone deal, defensive about office space
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...