Urban Outfitters Inc. has signed a 10-year lease for 16,500 square feet in two historic buildings on Westwood Boulevard, more than doubling its presence in the Westside neighborhood.
The deal, several years in the making, was the biggest apparel lease for the neighborhood in well over three decades. The prominent Philadelphia retailer’s commitment to the area was seen as a beacon to those who have watched other nearby retailers struggle to keep their doors open in the last two decades.
Urban Outfitters struck the deal with Century City real estate firm Topa Management Co., the largest retail landlord by square footage in Westwood Village. Though terms were not disclosed, real estate experts estimated its value at about $5 million.
Jim Brooks, president of Topa, an investment vehicle founded by the late John Anderson, said he expected Urban Outfitters’ bigger footprint in the area to unleash a flurry of lease activity, particularly from apparel retailers that have been sorely missing in the area.
“They have a number of retailers that follow them around,” he said. “Those retailers typically won’t commit or really engage until you can prove you’ve got a signed lease with Urban.”
Urban Outfitters will take over what for 28 years was a two-story Tower Records store at 1028 Westwood as well as a single-story building next door at 1038 that had been home to women’s fashion retailers. After Tower Records closed in 2003, the building sat vacant for 10 years. The neighboring building has been vacant for about three years.
Urban Outfitters, which occupies about 7,800 square feet at 1100 Westwood, plans to open in the new space next fall.
Rick Chancellor, Western region vice president in the Beverly Hills office for Philadelphia real estate firm McDevitt Co., represented both Topa and Urban Outfitters. He said negotiating the deal took years to work out for several reasons, most notably because Urban Outfitters already had a long-term lease for its space down the street that it didn’t make financial sense to abandon.
Working out who would pay for upgrades to the aging building – ripping out a mezzanine level and adding an elevator – further complicated negotiations. On top of that, Topa saw three changes in leadership over the years Urban Outfitters spent negotiating for the space, a tumultuous time for the company set off by Anderson’s death in 2011.
“We went through peaks and valleys during this process,” said Chancellor. “But ultimately, it’s sort of a testament to Urban Outfitters’ belief in Westwood Village.
Frankly, they’re not going to take this much time everywhere. If they run into issues, a lot of times they’ll just walk away.”
Westwood Village wasn’t always so desolate a place for retailers. In the 1970s and ’80s, people flocked to the area to go shopping and see movies at any one of the area’s many single-screen theaters. But it took a turn for the worse in the late ’80s and early ’90s when a rash of crime swept the neighborhood.
“There was a shooting, a stabbing and a few robberies that left a bad taste in people’s mouths,” said Carter Magnin, a retail real estate broker for Cushman & Wakefield of California Inc. “There was a stigma about the area and things have kind of gone downhill since then.”
Topa, which today owns about 230,000 square feet of retail space in Westwood Village in addition to about 350,000 square feet in Santa Monica, Brentwood and Pacific Palisades, acquired most of its Westwood property in a bulk acquisition in 2002.
Since then, Brooks said the retail environment has declined even further.
“When we acquired the portfolio, the retail market in Westwood was stronger,” he said. “Westwood Village went through some difficult times.”
Things have begun to look up again in recent years, though, as landlords put more emphasis on strategically curating their tenant mix. Almost two years ago, Topa brought in the now-popular eatery 800 Degrees, then an unproven pizza concept from L.A. restaurateurs Anthony Carron and Allen Ravert. Target Corp. opened one of the country’s first City Targets, a smaller urban concept, on Weyburn Avenue last year.
Brooks said the Urban Outfitters lease has already begun paying off.
“We saw the economic benefit of signing a lease with Urban,” he said. “We’re in discussions with two retailers looking for an aggregate 7,000 square feet as a direct result of our deal.”
Magnin said there’s no reason a curated selection of retailers shouldn’t succeed in Westwood, especially given its strong student population from neighboring UCLA and stock of expensive housing and Class A office space.
“Westwood has all the elements of a retail destination, so people have been kind of scratching their heads saying, ‘Why isn’t this working?’” he said. “This is hopefully a positive sign that the retail market in Westwood Village is turning around.”
