Hudson Pacific Properties, Inc. HPP and Macerich MAC are forming a joint venture to transform the iconic mall, The Westside Pavilion to an office space. Macerich, which is the owner of the property, handed over the property to the joint venture and is retaining 25% interest while Hudson Pacific has become the majority owner having 75% share.
Shrinking footfall amid shift of consumers toward online channels, store closures and bankruptcy of retailers are some of the reasons why mall landlords are shifting from retail.
Westside Pavilion, which spans across approximately 600,000 square feet, will only retain 100,000 square feet as its existing "entertainment retail space." While the other 500,000 square feet of the shopping center will be transformed into "state-of-the-art creative office space."
The total project costs, which include the asset value, are anticipated to be around $425-$475 million. The costs will be borne by both the companies in the share of their ownership interests in the joint venture.
Hudson Pacific will be responsible for the day-to-day operations and management of the project which is expected to be completed by mid-2021.
Chairman and CEO of Macerich, Art Coppola thinks that this joint venture will allow them to use the well-located mall to its best capacity. He is also very excited to partner with Hudson Pacific on this project as they excel in the office space sector.
Shares of Macerich have outperformed its industry in the past three months. During this time, the stock has declined 8.3% compared with industry
's decline of 9.9%.
Macerich currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here
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A few better-ranked stocks from the real estate space include HFF, Inc. HF
and CBRE Group, Inc. CBG
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CBRE Group's Zacks Consensus Estimates for 2018 earnings per share have been revised 5.3% upward to $2.98 over the past month. Also, it carries a Zacks Rank #2 (Buy). Its share price has risen 6.7% in three months' time. Wall Street's Next Amazon
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HFF, Inc. (HF): Free Stock Analysis Report CBRE Group, Inc. (CBG): Free Stock Analysis Report Macerich Company (The) (MAC): Free Stock Analysis Report Hudson Pacific Properties, Inc. (HPP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research