Fla. fund buys prime piece of Beverly Hills.Florida's public employee pension fund has purchased the historic office/retail complex at perhaps the Western U.S.'s most eminent intersection - Rodeo Drive Rodeo Drive (IPA: /roʊˈdeɪoʊ/) generally refers to a famous three-block long stretch of boutiques and shops in Beverly Hills, California, United States, although the street stretches further north and south. and Wilshire Boulevard Wilshire Boulevard is one of the principal east-west arterial roads in Los Angeles, California, United States. It was named for H. Gaylord Wilshire (1861-1927), an Ohio native who made and lost fortunes in real estate, farming, and gold mining. in the heart of Beverly Hills Beverly Hills, city (1990 pop. 31,971), Los Angeles co., S Calif., completely surrounded by the city of Los Angeles; inc. 1914. The largely residential city is home to many motion-picture and television personalities. according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. informed real estate sources. Executives with the Wilshire Rodeo Plaza's seller, an affiliate of Citicorp Real Estate Inc., and the buyer's investment adviser, Heitman Financial Ltd., declined to disclose the buyer or the price paid for the former West Coast headquarters of securities brokerage Drexel Burnham Lambert Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was driven into bankruptcy in the 1980s by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken. Inc. But local real estate sources said the Florida Retirement System paid more than $81 million for the 260,000-square-foot property. Title records identify the new owner as a Florida limited partnership known as Wilroad Associates. "We think this is an excellent long-term investment for our client," said Larry Krasner, the locally based Heitman executive vice president who helped negotiate the transaction on behalf of the buyer. "That location is 'ground zero'" in real estate terms, he said, adding that the Beverly Hills office and retail property markets are quickly recovering from the Southland's recession. Large blocks of quality office space are rare today in Beverly Hills - where restrictive zoning makes a property like Wilshire Rodeo Plaza "irreplaceable," Krasner noted. Along with the burgeoning strength of the Beverly Hills marketplace, the transaction reflects the capital markets' renewed confidence in Westside commercial real estate - although, like most recent investment deals, the Wilshire Rodeo went for well below its peak late-1980s value. In fact, Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. investors headed by Polylinks International Ltd. are thought to be plunking down some $100 million for the swanky swank·y adj. swank·i·er, swank·i·est Swank. swank  i·ly adv.swank Regent Beverly Wilshire Hotel - directly across Rodeo from the three-building Wilshire Rodeo Plaza property. In the wake of Drexel Burnham's well-publicized downfall and the previous property owners' bankruptcy filing, Wilshire Rodeo Plaza was just 25 percent leased when the Citicorp-led mortgage lender group took back the complex in the fall of 1993. Leasing turnaround Since then, Citicorp and its management and leasing agent, The Shorenstein Co., have brought occupancy up to well beyond the 90 percent mark. While the team was able to recruit key new office tenants, it has clearly transformed the complex's ground level - and even some space above - into a retail environment. Prominent along the chic stretch of Wilshire today is Wilshire Rodeo Plaza's just-opened Planet Hollywood eatery and the soon-to-come Nike Town store. The former is on two levels, the latter three. "Retail is the force that will continue to drive the (Beverly Hills) market into the future in terms of both property values and property use," commented Darrell Levonian, who heads the Westside-based Sands Commercial real estate brokerage. He cited the likes of Leslie's Swimming Pool Supplies and Kinko's Copies on Wilshire in Beverly Hills - newcomer tenants the ritzy ritz·y adj. ritz·i·er, ritz·i·est Informal Elegant; fancy. [After the Ritz hotels, established by César Ritz (1850-1918), Swiss hotelier. boulevard wouldn't have seen in years past. Site transformed Citicorp Real Estate Vice President/Senior Asset Manager Geoffrey Sears acknowledged that the lender group invested "millions" into the property's transformation. But the investments seem to have paid off. The price the Florida group The Florida group (Sp.: grupo Florida) were a Buenos Aires-based avant-garde literary group in the 1920s, known for their embrace of "art for art's sake". reportedly paid amounts to about $310 per square foot - perhaps the most anyone has paid for a large commercial property here since the late 1980s. The property actually has three addresses: adjacent converted department stores at 9536 and 9560 Wilshire and a late-vintage office building immediately south at 131 S. Rodeo. Partnerships headed by Westside-based developer Avi Lerner - and said to include Drexel Burnham "junk bond junk bond, a bond that involves greater than usual risk as an investment and pays a relatively high rate of interest, typically issued by a company lacking an established earnings history or having a questionable credit history. king" Michael Milken Michael Milken As an executive at Drexel Burnham Lambert Inc. during the 1980s, Milken used high-yield junk bonds for financing and corporate takeovers. While his personal wealth was enormous, he spent two years in prison after pleading guilty to charges of securities fraud. - owned the properties and leased them to the fallen securities firm. When the partnerships deeded the properties over to Citicorp in compliance with their consolidated bankruptcy reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. , the total unpaid mortgage principal and interest added up to about $94 million. Other key new tenants at the complex now include Merrill Lynch & Co., Equity Marketing Inc., United Talent Agency and Pace Wildenstein Gallery. Shorenstein will continue to manage and lease the complex. Heitman will have overall asset management responsibilities. |
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