California Mart, L.A.'s Apparel Hub, for Sale
The hub of Southern California’s apparel industry--the massive California Mart in downtown Los Angeles--has been put up for sale and is expected to draw bids of more than $100 million, according to people familiar with property.
Equitable Life Assurance Co., which took control of the property in 1994 in a foreclosure, is selling the complex as part of an ongoing effort to reduce its real estate portfolio. Officials who handle the giant insurance company’s portfolio said they had no comment.
However, real estate executives in Los Angeles said that Equitable has selected Cushman Realty and its broker Carl Muhlstein to handle the sale of the 2-million-square-foot California Mart, which consists of four buildings at Ninth and Main streets. Cushman Realty also brokered the $157-million sale in October of the landmark Pacific Design Center, the giant furniture and interior design showroom in West Hollywood.
The California Mart--which is twice the size of the Pacific Design Center--is home to 1,200 apparel tenants whose wholesale showrooms draw retail store buyers from around the globe. The property also serves as a major anchor to downtown’s Fashion District, home to hundreds of wholesale and retail apparel businesses. In addition, the building houses the fashion design school operated by Otis College of Art & Design.
Equitable is credited with revitalizing the wholesale center. Several developers in the early 1990s tried to establish rival wholesale centers in other parts of Los Angeles after many tenants grew frustrated over rising rents, deteriorating service and concerns about neighborhood safety and cleanliness.
The turnaround began after Equitable invested about $25 million in improvements, including revamping air conditioning and heating systems and upgrading public lobbies. The California Mart also teamed up with apparel industry trade groups to boost promotion of local designers to overseas customers. The creation of a business improvement district has resulted in cleaner sidewalks and streets and increased security patrols.
The new initiatives--and a healthier Southern California economy--have boosted occupancy at the California Mart to about 80% from 67% in 1994, according to industry statistics and broker estimates.
The California Mart was founded by Harvey and Barney Morse in the early 1960s. The Morse family controlled the building until 1994, when it defaulted on about $250 million in loans.