The University of California, Los Angeles, is buying Hudson Pacific’s One Westside and Westside Two office development for $700 million, ending Google’s plans to occupy most of the 700,000-square-foot campus.
UCLA plans to convert the property into a medical and engineering research center, according to an announcement on Wednesday. One Westside, and its neighboring Westside Two, is located at 10800 West Pico Boulevard in West Los Angeles.
Urbanize reported the deal last week, citing an environmental review notice with the state that did not disclose terms of the sale.
The deal comes out to about $1,020 per foot, one of the priciest office deals to trade on a per-square-foot basis since the pandemic, when remote work put downward pressure on office values and occupancy.
Hudson Pacific and Macerich redeveloped the site, formerly the Pavilion Mall, into an office development for Google. In 2019, Google announced intentions to sign a 14-year lease at the One Westside site, with initial plans to move in during 2022, after tenant improvements were completed. The tech giant then pushed back its move-in date to 2023.
Google agreed to pay $36.6 million in annualized base rent, according to SEC filings.
“We’re continuing to take a measured approach to ensuring our real estate investments match the current and future needs of our workforce,” Scott Foster, Google’s head of real estate and workplace services, said in a statement.
Google helped connect UCLA and Hudson Pacific and facilitated the acquisition, according to a Google spokesperson.
Hudson Pacific owns a 75 percent stake in One Westside, while Macerich owns the remaining 25 percent.
The entire One Westside project was estimated to cost between $500 million and $525 million to build, according to SEC filings.
Proceeds from the sale will be used to pay off some of Hudson Pacific’s debt, CEO Victor Coleman said in a statement, including a $325 million construction loan on the project. Ratings agencies, including Fitch, had flagged Hudson Pacific’s leverage as concerning over the summer.
“We now have no debt maturities until year-end 2025,” Coleman said.
Going forward, One Westside will house the state of California’s institute of immunology and UCLA’s quantum science and quantum engineering facilities.