Google Still on Track to Lease Macerich’s 548,000 SQFT Office Campus in Los Angeles

Macerich, Google, Los Angeles, One Westside, Westside Pavillion Shopping Center, Hudson Pacific Properties, Primark, Gensler

By Catherine Sweeney

While cutting back on development expenditures amid the COVID-19 pandemic, realty investment trust Macerich announced One Westside, a 584,000-square-foot office campus in Los Angeles, is making steady progress, according to a first quarter earnings call. The redevelopment, which has been pre-leased to Google, remains on track for delivery in early 2022, the company reported during the call.

The property is located at 10800 Pico Boulevard, and was the former home of Westside Pavillion Shopping Center, before Macerich, in partnership with real estate investment trust Hudson Pacific Properties, Inc. announced plans to redevelop it in 2018. 

In 2019, the companies announced plans to lease the entirety of the redevelopment to Google. Google’s lease is expected to begin upon completion in 2022, and will last approximately 14 years, according to Macerich. 

“Macerich properties are known for the strength of their markets and unparalleled locations. The fact that Google is taking all available creative office space in this joint project with Hudson Pacific underscores the power of our well-placed real estate,” CEO and Director of Macerich Tom O’Hern said at the time of the lease. 

The office campus is being designed by Gensler, and once completed will offer three floors of commercial office space, 45,000 square feet of exterior terraces and patios and a rooftop garden deck. The project was estimated to cost approximately $425 to $450 million to complete. 

On Pico Boulevard, One Westside is located within close proximity to the Expo Line light rail’s Westwood/Rancho Park station and the I-405 and I-10 freeways. It is also less than three miles from the business and residential communities of Century City, Westwood, Culver City, Mar Vista and Brentwood.

In addition to the pre-leased space, Macerich overall reported positive growth in leasing transactions during the first quarter of 2021. While Google was the only office lease transaction reported by Macerich during the earnings call, the company, which focuses primarily on retail development, reported significant transactions in that sector as well. 

“The leasing environment has significantly improved. Leasing volumes were very good in the first quarter, on par with the first quarter of 2020 when leasing was largely unimpacted by COVID. The demand we are seeing is not only from traditional retailers, but also non-traditional uses, such as fitness, health and wellness, co-working, medical, hotel, big box, food, beverage and entertainment,” O’Hern said during the first quarter earnings call. 

During the call, the company also announced two new lease transactions with Primark across its nationwide portfolio, one in Tysons Corner Center in Virginia, and one at Green Acres Mall in New York. Both are approximately 50,000 square feet, and add to four additional leases Primark has signed with the company.

Other leases signed in the first quarter include Fabletics at Los Cerritos Center in Los Cerritos, a Lululemon expansion at Village at Corte Madera in Corte Madera, and two electric vehicle deals with VinFast, one at Village at Corte Madera and the other at Santa Monica Place.

In a two week period, the company reported 95 leases – approximately 256,000 square feet. Iin the past 12 months, the company also leased an additional 400,000 square feet to new retailers, including Buck Mason, Chanel Face and Beauty and Offline by Aerie. 

Looking ahead, Macerich has signed leases for an additional 250,000 square feet of new stores, with approximately 100 negotiations totaling 800,000 square feet underway. The majority of these are set to begin in 2021 or early 2022. 

“What’s probably most noteworthy about our leasing activity is the amount of new and renewal leases signed through mid-April 2021 is actually outpacing the number of leases signed during the same pre-COVID period in 2019. And 2019 was an extremely high-volume year for Macerich from a leasing standpoint,” Doug Healey, Macerich’s senior executive vice president of leasing, said.

“The pace of our lease signings during the past two quarters clearly underscores the fact that our leasing business is back on par with historical pre-COVID levels and that retailers recognize the need to maintain existing space and secure new quality town centers.”