Two more retailers announced closures at the troubled Santa Monica Place shopping center this week, underscoring the ongoing challenges facing the 527,000-square-foot property as new management takes control of the financially distressed mall.
True Food Kitchen closed its Santa Monica location after 14 years, directing customers to nearby restaurants in Century City, El Segundo and Pasadena. Luxury skincare retailer Aesop also announced it has closed its Santa Monica Place store on Monday, May 26, though the company has recently opened a new location on Montana Avenue.
The closures come as Prism Places, a commercial real estate management firm with $2.8 billion in assets under management, was appointed to manage the struggling shopping center. The property is now under control of court-appointed receiver Trigild after previous owner Macerich Co. defaulted on a $300 million loan.
The management change represents the latest chapter in the decline of what was once a flagship property for Macerich, which owned the center since 1999. The mall currently has a vacancy rate of almost 70%, with its biggest remaining draws being the Cayton Children's Museum, Cheesecake Factory and the recently opened Din Tai Fung restaurant.
Santa Monica Place, originally designed by renowned architect Frank Gehry, underwent a $265 million renovation in 2010 to transform from an enclosed mall into an open-air center. The property was once home to luxury retailers, dining options, department stores and a movie theater, but has struggled to maintain tenants in recent years.
While permanent tenants have been difficult to secure, the mall has found some success with rotating pop-up attractions on the lower levels.
Prism Places brings experience in repositioning distressed assets in Southern California, having previously revitalized RUNWAY Playa Vista and currently managing other regional shopping centers including Pasadena Commons, Paseo Nuevo in Santa Barbara, and properties on Rodeo Drive.
The company's strategy typically involves balancing global and local brands for retail and dining, optimizing internal property design and utilizing locally produced events to draw visitors.
The shopping center's troubles reflect broader economic challenges facing Santa Monica. The city continues to operate with a structural deficit despite new tax measures, requiring an additional $33.2 million from General Fund reserves over the next five years to balance the budget, according to a recent staff report.
Santa Monica's sales receipts from July through September were 11.1 percent below the same period in 2023. Excluding reporting aberrations, actual sales declined 6.8%, with significant drops in general consumer goods, auto sales, dining establishments and business-industry categories.
The city's tourism industry continues to suffer from pandemic impacts, and an exodus of corporate businesses has driven the daytime population to 60% of pre-pandemic levels. The reduced foot traffic has severely impacted local businesses and key revenue streams including sales tax, parking fees and hotel taxes.
Trigild's appointment as receiver represents a significant step in addressing the financial troubles that have plagued the shopping center. Court-appointed receivers typically oversee troubled properties during transition periods, working to stabilize operations while legal and financial matters are resolved.
Despite the challenges, City Hall maintains that an economic turnaround is on the horizon, pointing to plans for a new hotel and increased housing construction in the downtown area.
Macerich announced last year that Santa Monica Place was among several properties the company wanted to sell before ultimately defaulting on the loan and losing control of the asset.