Restaurant row may rise in Beverly Hills.

Spago and Chasen's restaurants brought new life to Canon Drive when they opened in April, and now a Beverly Hills-based investment group hopes to further that momentum and possibly transform the street into a restaurant row.

Lexington Commercial Holdings is in escrow to buy a 67,500-square-foot property thai fronts on North Canon Drive and extends through to Beverly Drive. Alisa Freundlich, chief financial officer for Lexington, said the deal could close within the next week.

The value of the transaction was not disclosed, but real estate agents who work in the area estimate that the sale price is around $12 million.

Freundlich said the company is considering several options for developing the property. But she noted that the recent introduction of Chasen's and Spago "have enhanced the value of (Canon Drive) and we'd certainly like to follow that trend."

She added that the development most likely will involve "a family' entertainment component. We're looking at a safe and fun place for families to be with their kids."

An "entertainment component" could possibly be a movie theater or restaurant. Freundlich said. But the development "will definitely be a destination."

Although the posh Spago and Chasen's restaurants have brought more people to Canon Drive. local real estate observers say the street is still one of the less lustrous points in the Beverly Hills' "Golden Triangle" retail district, which is bounded by Santa Monica Boulevard, Wilshire Boulevard and Crescent Drive.

"Canon Drive has traditionally been the stepchild street," said Matthew May, a partner at commercial real estate brokerage Madison Partners.

Rodeo Drive attracts the tourists, haute couture boutiques and commands $12 per-square-foot monthly rents; Beverly Drive commands $4 per-square-foot rents and brings visitors and locals to the Cheesecake Factory and Nate 'N Al Delicatessen & Restaurant.

Canon Drive commands rents of around $3 per square foot, and the street traditionally has been home to more utilitarian retailers, such as drug and stationery stores.

"They're all good tenants," May said. "But there was no energy there."

That lack of energy was especially pronounced at nighttime. But Lexington, on the verge of owning one of the largest contiguous parcels in the Golden Triangle, might change that.

If Lexington decides to turn Canon Drive into a restaurant row, the managers at both Chasen's and Spago said they would welcome the competition.

Bart Mahoney, manager at Spago, said he's seen the concept work in New York and San Francisco. A more tourist-oriented restaurant row exists a couple miles away from Canon Drive, on La Cienega Boulevard just north of Wilshire. Among the notable eateries on that stretch are Lawry's Prime Rib, Arnie Morton's of Chicago and Matsuhisa.

"People tend to think of one street as a destination when they go out to eat," he said, adding that customers might have a cocktail at one restaurant, eat their meal at another and finish with dessert at a third.

Freddy Kernbach, manager at Chasen's, agreed. "That'd be spectacular," he said. "Anything to get more people here."

Spago and Chasen's moved in after the Bistro and its annex down the street, the Bistro Gardens, closed. Both restaurants fell victim to California's recession.

Doug Brown, a principal with Beverly Hills-based retail developer Regent Properties, said the timing is right for a Canon Drive development - and the remaining key ingredient is tenant mix.

"Canon is ripe to become a vibrant pedestrian area," he said. "Beverly Hills needs a place where the locals can go to (have fun), not just the tourists."

He added that an art-house movie theater would "probably be very successful in light of the neighborhood's sociological mix."

This isn't the first time Canon Drive has been poised for a renaissance. Bloomingdale's, which owns part of the land that Lexington is purchasing, almost established a store at the Beverly Drive location. The upscale retailer ultimately opted to open in Century City after The Broadway store there was shut down.

That parcel has since sat largely vacant. The Canon Theater sits on the lots Lexington is buying, which stretch from 203 to 215 N. Canon Dr. and from 214 to 222 N. Beverly Dr.

May, who noted that millionaire Lou Gonda is a partner in Lexington, said the development group has the savvy and financial strength to invigorate Canon Drive. Gonda made his fortune in the commercial aircraft leasing business.

"They've got the wherewithal to do the project at one time, so it makes a spectacular debut," he said.

Lexington has affiliates that own the Figueroa Plaza office complex downtown and a Beverly Hills office building at 9350 Wilshire Blvd., Freundlich said.