For the second time in as many weeks, a major retail landlord has quit Santa Monica. This time it’s Macerich, which has turned over Santa Monica Place to the lender after defaulting on a $300-million mortgage loan. 

Citing a report in WWD, the Santa Monica Daily Press quoted Macerich CFO Scott Kingsmore as saying, “It was pretty clear that Santa Monica [Place] has continuing issues and it is under water.” The current broker opinion of value on the property is about $264.5 million. “Ultimately, trying to figure out the end game was just too obscure,” said Kingsmore. 

Macerich has owned the 527,000-square-foot property, which was built in 1980 to revitalize Santa Monica’s Third Street Promenade, since 1999. Connect CRE reported last week that another retail REIT, Federal Realty Investment Trust, had left the Santa Monica market, selling its remaining Third Street portfolio for $103 million. 

When Jackson Hsieh took over as Macerich’s CEO earlier this year, he grouped the locally based REIT’s 43 properties into four categories, ranging from great to bad. Santa Monica Place, which has suffered numerous tenant departures since the pandemic, was among 14 Hsieh categorized as bad.