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Wednesday, Feb 8, 2023

Developer Breathes New Life into Failed Hawthorne Mall

Developer Breathes New Life into Failed Hawthorne Mall

Fortress: Architects aim to improve fortunes by opening up former mall to street.


Staff Reporter

Nearly 1 million square feet of a Hawthorne eyesore is in the early stages of a redevelopment its developer thinks will jumpstart languishing retail and office markets.

The troubled Hawthorne Plaza, once home to a variety of failed retailers and now a vacant graffiti-marked shell along Hawthorne Boulevard, is in the early stages of a multimillion dollar rehabilitation.

Charles Co., owned and run by the Gabay family, is converting the site at Hawthorne and 120th Street into a mixed-use project of at least 385,000 square feet of Class-B office space and a yet-to-be determined amount of retail. The three-level mall, which closed in the mid-90s, will be redubbed South Bay Center One and total 900,000 square feet upon completion.

The developer, which did not return calls seeking comment, purchased the 35-acre site about a year and a half ago, and is looking to have the project renovated between 2004 and 2006, according to Vasilis Papadatos, the Perkowitz + Ruth Architects project director heading the first phase of the build-out.

The project is being marketed as a predominantly office complex with larger floor space availability and cheaper rents than South Bay markets like El Segundo and the LAX Corridor, according to Eric Lastition, senior vice president at Colliers Seeley, who, with Stephen Cramer, is a leasing agent on the property.

“We’re getting interest from nonprofit groups, service-related companies, aerospace uses and some further county and federal uses the kind of groups that would need open space for cubicles,” said Lastition.

The developer has signed an 85,000 square foot lease with Los Angeles County for its social security and childcare administrative offices, said Papadatos. The office space, at the northwest corner of the complex, should be completed in September. Lastition said the deal is for 10 years, with options to expand to 134,000 square feet.

Lastition did not know the value of the county lease, which was brokered directly with the developer.

Another 250,000 square feet is being built out for office space and marketed at $1.25 a foot. The average asking rent for the 17 million-square-foot Class-B market in the South Bay was $1.77 in the first quarter, according to Grubb & Ellis Co.

“There’s very little space with large chunks available in that area, and they’re willing to be (financially) aggressive,” said Richard Rizika, senior vice president at CB Richard Ellis’ Torrance office. “There’s not much competition.”

Amid a South Bay market where vacancies have jumped to 19 percent in the first quarter from 13 percent a year earlier, however, the large floor plans lack the flexibility for sub-40,000-square-foot tenants and could be difficult to fill, according to one South Bay broker.

“You can’t break up the building for smaller tenants,” said the broker. “It’s not going to be an easy fix.”

‘An old dark mall’

The latest redevelopment plan is yet another attempt to save a property that has seen nothing but trouble since its construction 25 years ago.

In 1972, the city designated Hawthorne Plaza its first redevelopment project. The mall was completed in 1977 by developer Ernest Hahn, whose company was later bought out by TrizecHahn Corp.

The property changed hands four times (once being bought out of bankruptcy), before being shut down shortly after anchor stores Broadway, Montgomery Ward and J.C. Penney left between 1994 and 1995.

“It was an old dark mall,” said Chris Mailing, senior director at Marcus & Millichap. “The demographic shift and other retail locations like South Bay Galleria took away dollars.”

Papadatos said the renovation is attempting to overcome some of those obstacles. “You had a fortress look, but it’s changed to read more like an office building and relates more to the outside,” he said.

“They’re punching windows into the fa & #231;ade and skylights into the space,” Lastition said. “They’re trying to open it up.” The fa & #231;ade work will be completed within the next couple of months.

While the developer has committed more than 300,000 square feet of the project to office space, the use of the remaining 515,000 square feet will be determined by market conditions.

Papadatos estimated a 50/50 mix of office and retail, which would put the retail space figure at about 260,000 square feet. Lastition said he’s in negotiations with a fitness center to take 45,000 square feet.

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