Los Angeles Adaptive Reuse Scores $119M Loan
- Nov 18, 2019
GPI Cos. has received $119.3 million in construction financing for its West End adaptive reuse project in West Los Angeles. JLL Capital Markets arranged the floating-rate loan, which bears a two-year term and was provided by ACORE Capital.
Located at 10730 W. Pico Blvd., the 6-acre project is converting the former home of a Macy’s store into a 230,000-square-foot, Class A creative office building with ground-floor retail and restaurant space. The offices will feature large floorplans and windows, while the property will feature floor-to-ceiling heights, a common outdoor space, new parking and outdoor courtyards. The project will also benefit from being closely located to interstates 10 and 405 and the recently expanded Expo Line.
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GPI originally acquired the Macy’s property in 2017 for $50 million, with the help of a $28.7 million loan secured by HFF. Macy’s was one of the major tenants at Westside Pavilion Mall, which had been struggling with growing retail woes in recent years. In 2018, a joint venture between Hudson Pacific Properties and Macerich decided to transform the property into a state-of-the-art creative office development, scheduled for completion by mid-2021.
The appeal of adaptive reuse
The former Macy’s conversion is not the only project of this kind to attract attention in Los Angeles. In a JLL report on the increase in adaptive reuse in the city, the transformation of Westside Pavilion Mall was one of nine similar projects set to deliver in the next three years. The other developments underway include a newspaper publishing headquarters, an aerospace campus and two stand-alone big-box retail sites. JLL attributes this rise in adaptive reuse to the lack of developable land coupled with the rising demand for creative office space for large tenants.
JLL Executive Managing Director Kevin MacKenzie, Managing Director Greg Brown, Senior Director Jeff Sause and Director Peter Thompson lead the capital markets team. In a prepared statement, GPI Managing Partner Lee Wagman said the development is set to attract tenants from the media, technology and financial sectors.