The recent sale of Macy’s Inc.’s Westside Pavilion location in West Los Angeles has cast doubt on the store’s future as the company progresses with plans to close about 100 retail sites nationwide.
The 220,000-square-foot building, which connects to Macerich Co.’s Westside Pavilion mall, sold last month to GPI Cos. for $50 million. Although the store has remained open, the expansion of another nearby Macy’s could bode ill for the store.
Macy’s did not name the Westside Pavilion store, at 10730 W. Pico Blvd., nor any other L.A. locations on its list of sites that it announced last month it planned to close. Neither did it identify the location as one of a handful that were going to be sold and leased back.
Chuck DiGiovanna, Macy’s senior vice president for real estate, would not comment.
Macy’s is planning to expand its store at Westfield Century City, less than two miles away, a component of Westfield’s $800 million renovation, with an opening slated for spring.
That raises the question of whether Macy’s would keep open the Pico location, which has a fortress-like design that is out of vogue.
“I would say with confidence that they don’t need this location because the Century City location is huge,” said Gabe Kadosh, a vice president for retail services at Colliers International, who was not involved with the sale.
For now, with Macy’s still in operation on Pico, he expected that it had negotiated a lease-back for the 220,000-square-foot building.
Cliff Goldstein, GPI’s managing partner, said he could not comment on the transaction or plans for the Macy’s site. Based in Brentwood, GPI targets value-add acquisitions in retail, multifamily, office, and mixed-use sectors.
Mattel Makes Plans
Although Mattel Inc. has a proposal before the city of El Segundo to significantly expand its 12.5-acre headquarters, a company spokesman said the project isn’t actually going to be built – at least not yet.
The company last month refiled its development proposal for expanding its campus and is preparing reports related to the environmental impact for the project. The city planning commission expects to receive them by next fall, and to bring the project to the City Council by the end of the year.
In what is a rare move even for a large company, Mattel seems to simply want to keep options open for the future, particularly because it is asking for substantial planning variances.
Mattel spokesman Alex Clark said the company has long contemplated expanding.
“We have no plans for any new construction at our corporate headquarters in El Segundo,” he wrote in an email. “However, we are always reviewing our needs with regards to real estate and office space.”
Mattel’s draft environmental impact report includes hypothetical plans to build a 14-story office building on Continental Boulevard. The project would add almost 446,000 gross square feet, according to a city notice.
The proposal depends on securing zoning and general plan changes to allow a higher density than otherwise permissible. The deal would include a development agreement ensuring the entitlements stay valid for the length of the agreement – typically 10, 15, or 20 years.
That could help Mattel down the road if the city decides to put limits on development.
“The development agreement will lock in place today’s ordinances. They won’t be subject to anything else going on,” said Joel Miller, vice president of land-use consultant firm Psomas, based downtown.
But Miller doesn’t usually see companies looking ahead more than a few years.
“Most people don’t want to go through the tortuous process of land use entitlements unless they have a need to do so,” he said.
Cushman & Wakefield is bringing on five veteran brokers.
Brandon Gill, Brandon Burns, and Jae Yoo are joining from CBRE, where they started out as traditional industrial brokers downtown before negotiating the sales of highly valued Arts District warehouses as conversion and development sites, among them the Ford Factory.
Also joining Cushman are Shaun Stiles and Katie Cowan from Jones Lang LaSalle. The pair will keep their longtime emphasis on the Tri-Cities office market.
Staff Reporter Daina Beth Solomon can be reached at firstname.lastname@example.org or (323) 556-8337. Managing Editor Paul Eakins contributed to this report.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Macy’s Sells West L.A. Store for $50 Million, Signaling Possible Closure
- Macy’s to Close Westside Pavilion Store Next Year
- Westside Pavilion Faces Vacancies, Debt Pressures
- Office Conversion Planned for Former Westside Pavilion Macy’s
- Mall Renovates For Comeback
- Macy’s Redevelopment Gets $120 Million Financing
- GPI Founders on Hunt for More Projects
- El Segundo Building Gets $55 Million in Financing