Mall landlord Macerich Co. said Tuesday it was talking to possible buyers of its Westside Pavilion, a 755,000-square-foot mall in west Los Angeles that has been suffering from weakening occupancy rates, who might have another use for the space.
No deal is imminent but Art Coppola, chief executive officer at Macerich, said during the Santa Monica-based company’s third-quarter earnings call Tuesday that the company has received interest from a number of possible buyers. Mr. Coppola said he predicts that Macerich will no longer own the asset within a year.
The Westside Pavilion mall in west L.A.Photo: Esther Fung/The Wall Street Journal
“West L.A. has too many malls chasing the same customer and it was due for consolidation,” he said.
The three-story mall lost one of its anchor stores, Nordstrom, after the retailer decided to relocate 2 miles away to Century City, another shopping center recently opened by Westfield Corp.
Westside’s remaining department store, Macy’s Inc., will close its store next year. Other retailers that are still open in the mall include H&M, Victoria’s Secret and Amy’s Hallmark Shop.
A light rail station opened a block away from the Westside Pavilion recently and the property could be rezoned for other uses. “It’s quite likely that other users are going to value that real estate more than a horizontal retail facility, and we’re seeing that in terms of the demand and that’s coming from really a tremendous number of people,” said Mr. Coppola.
Macerich, which owns other high-profile malls including Santa Monica Place and Tysons Corner Center in Tysons, Va., said it was fully current on the debt backed by Westside Pavilion. In September, the $142 million loan, which had been packaged into commercial mortgage debt securities, was transferred to a special servicer, which is a type of firm that oversees workouts of loans of troubled properties.
Mall landlords and analysts have said that there is an oversupply of retail real estate in the country and finding new uses for some of the outdated shopping centers would help to ease some of the glut.
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