CIM in Deal to Buy Hollywood & Highland
Hollywood-based real estate company CIM Group Inc. has reportedly struck a deal with Hollywood & Highland developer Trizec Properties to purchase the retail and entertainment complex for $200 million, well below the $650 million it cost to build the center.
While neither party confirmed the sale, Trizec spokesperson Rick Matthews said the company had been speaking with several investors.
“The intention was to complete Hollywood & Highland, stabilize it and then sell it at the right time,” Matthews said. “In 2003, operating results for the various components of the property began to gain momentum, and without a formal marketing effort, a number of very credible potential investors came forward. We began discussions with several [parties].”
CIM is reportedly in due diligence for the property. If the deal is completed, CIM would inherit a venue that is experiencing renewed growth. After the Sept. 11 terrorist attacks, Chicago-based Trizec was forced to write down the property twice, as the tourist traffic the area relies on dropped dramatically.
The center houses the Kodak Theatre, home to the Academy Awards show; a 640-room hotel; and apparel retailers including Ann Taylor, Bebe, Gap, Banana Republic, Hot Topic and Planet Funk.
In recent months, Trizec scrambled to reposition the center as more of an entertainment destination. The company added a popular bowling alley. “American Idol” host Ryan Seacrest launched a new television talk show from the center.
“Retail now has more of an ancillary presence [at Hollywood & Highland],” said Kerry Morrison, executive director of the Hollywood Entertainment Business Improvement District. “Trizec has done a yeoman’s job over the past year to 18 months to reposition it as an entertainment destination, and I’m not sure if it ever was intended as a retail destination. With Ryan Seacrest and the ’Jimmy Kimmell [Live]’ show across the street, it’s really taking off splendidly.”
CIM has been on a binge of late. The company, armed with pension fund money that includes investments by CalPERS, has undertaken several residential mixed-use properties in downtown Los Angeles, including a $220 million project at Ninth and Flower streets and another at Eighth Street and Grand Avenue. The developer has planned loft apartments at both locations. A Ralphs supermarket will be part of the Flower Street project.
CIM also owns the TV Guide building near Hollywood & Highland. —Robert McAllister
