Struggling Westside Pavilion to be converted to office space for rent
Westside Pavilion, a longtime landmark Los Angeles shopping center, will be converted to mostly office space in the wake of losing its anchor department stores and the rise of online competition.
Hudson Pacific Properties Inc. will turn the mall into about 80% offices for rent while keeping the rest of it retail, the Los Angeles developer and landlord said Monday.
The 12-screen Landmark Theatres complex will remain in the reconfigured mall, as will Westside Tavern restaurant and other shops mostly on the ground floor along Pico and Westwood boulevards.
The transformation set to be completed by mid-2021 reflects rising demand for offices on the Westside and the loss of market share by the mall — which opened in 1985 — to nearby competitors, including Westfield Century City, Santa Monica Place and the Third Street Promenade in Santa Monica.
Macy's, an anchor of Westside Pavilion, is set to close at the end of this month. Macy's has already opened a new store at Westfield Century City.
Nordstrom, another longstanding Westside Pavilion anchor, decamped last year for the Century City mall, which recently completed a $1-billion renovation and upgrade, including the first California branch of Eataly, a fashionable gourmet Italian food emporium.
It's unclear how much the makeover of the Westside Pavilion will cost. Hudson Pacific put the project cost at between $425 million and $475 million, but those figures include the undisclosed estimated value of the existing mall. Santa Monica-based mall landlord Macerich, which owned the shopping center, contributed the property to a new joint venture with Hudson Pacific. Hudson Pacific owns 75% of the joint venture and will be the property's day-to-day operator and developer. Macerich owns 25%.
The remade Westside Pavilion will have about 500,000 square feet of offices and 100,000 square feet of retail space, including the movie theaters.
The new venture does not include the 215,000-square-foot Macy's building in the mall, which the retail chain sold to Goldstein Planting Investments for $50 million more than a year ago. The Los Angeles developer declined to comment on its plans for the three-story Macy's site.
Hudson Pacific specializes in developing and operating office and entertainment properties on the West Coast. It is one of the largest independent film studios in the country, owning Sunset Las Palmas Studios, Sunset Gower Studios and Sunset Bronson Studios, all in Hollywood.
Hudson's office tenants include Netflix, Riot Games, NFL Networks, Google and Amazon.
"Westside Pavilion is a perfect opportunity for us to reposition a marquee asset in a premier location," Victor Coleman, chairman of Hudson Pacific, said in a statement. "The project is poised to capture the strong demand from tenants for creative office space on the Westside."
Hudson Pacific declined to elaborate on its plans, but a Westside office broker not involved with the project speculated that a remade mall would hold appeal for technology and entertainment companies that appreciate unconventional office spaces and vast floor plates like those found in a mall.
"This property combines all the elements those people are looking for, with dramatic space that is untraditional," said broker Blake Mirkin of CBRE.
The mall already has a dramatic atrium, Mirkin said, and could be remade to include outdoor space. It's also close to an Expo Line rail stop and two freeways.
"The Westside Pavilion is at Main and Main," he said, using a real estate term for good location. "It will clearly be able to capture attention."