DJM, Gaw Capital Purchase Iconic Hollywood Retail Complex
The private equity firms have teamed up to acquire the 463,000-square-foot shopping center from CIM Group. The property also houses the venue for the Academy Awards ceremony.
Hollywood & Highland. Image courtesy of DJM and Gaw Capital USA
Private equity real estate firms DJM Capital Partners and Gaw Capital USA have teamed up to acquire the Hollywood & Highland shopping complex from CIM Group, with plans to upgrade and rebrand the landmark 463,000-square-foot asset.
The property at 6801 Hollywood Blvd. traded for an undisclosed amount, but according to The Real Deal, the price was $325 million. The partners said the sale is the largest single-asset retail deal outside of Manhattan in nearly three years. The project also houses the 180,000-square-foot Dolby Theatre, which serves as the venue for the Academy Awards and was not included in the transaction.
Opened in 2001, the shopping center sits at the intersection of Hollywood Boulevard and Highland Avenue and adjoins the famed TCL Chinese Theatre. San Jose-based DJM and the US arm of Hong Kong’s Gaw Capital Partners said they planned to “reimagine” the 7.6-acre site, with renovations to begin in 2020 and completion targeted for 2021.
The overhaul is expected to include upgrades to the retail space, the rebranding and enhancement of the common areas, creation of better event spaces and adjustment of the retail mix, according to a statement. The project’s new owners added that they see an opportunity to bring modern digital media, global brands and top food and beverage options to the property.
Eastdil Secured advised on the transaction and a Natixis financing team led by Jerry Tang and Greg Murphy provided an acquisition loan, along with a future funding component.
CIM steps back
CIM, a real estate developer founded by Israeli immigrants, bought the Hollywood & Highland complex—in a deal that included the neighboring Renaissance Hollywood Hotel—from Trizec Properties for roughly $201 million in 2004. The struggling complex was formerly valued at nearly $650 million but had run into a series of problems including cost overruns, delays and a tourism slump, according to news reports.
The company boasts that it made various enhancements to the property that boosted foot traffic and operating income significantly. The development now welcomes more than 25 million tourists and local visitors per year. CIM sold the hotel in 2012 and recapitalized the retail and entertainment center in a new joint venture managed by the firm the following year.
CIM will continue to operate the 3,400-seat Dolby Theatre. In 2012 the Academy of Motion Picture Arts & Sciences agreed to continue the Oscars ceremony at the venue for another 20 years.
Gaw gets Hollywood nostalgia
The latest sale extends Gaw Capital’s love affair with La La Land. Chairman Goodwin Gaw started the business in 1995 by acquiring and redeveloping the historic Hollywood Roosevelt Hotel one block away from Hollywood & Highland, later founding Gaw Capital in a partnership with his brother Kenneth.
Other Los Angeles holdings of the family-run private equity shop include the Bradbury Building at 304 S. Broadway and the headquarters of the Los Angeles Football Club at 818 W. 7th St. Gaw Capital, which manages more than $23 billion in real estate assets globally as of the first quarter of 2019, scooped up 3030 Studios, a 107,875-square-foot studio campus in Los Angeles from World Class Capital Group last year.
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