One of the most desirable pieces of real estate in the country — the site of a former department store in Beverly Hills — is on the market again.
Unlike other commercial properties across Southern California that have seen major long-stalled developments finally get underway in the last few years, this one has been a struggle. Once home to an upscale Robinsons-May store, the property has seen multiple owners who have so far been unable to bring a condominium complex designed by a famous architect to life.
Fortunes have been won and lost in the process, however, and vast sums are again on the line.
Joint Treasure International, a Hong Kong private equity firm, bought the 8-acre parcel near the intersection of Wilshire and Santa Monica boulevards in 2010 for $148 million. The firm had said it would complete an existing plan to build 235 condos on the property at 9900 Wilshire Blvd.
The 62-year-old building, which stands across Merv Griffin Way from the Beverly Hilton Hotel, has been unoccupied for nearly a decade. In a separate development, the owner of the hotel announced this month that he will start work soon on a Waldorf Astoria hotel that will rise next to the Hilton.
Representatives of Joint Treasure could not be reached to explain why they want to sell the Robinsons-May property or how much they hope to get for it. Real estate experts familiar with the Beverly Hills market think that the property is worth more than twice what Joint Treasure paid for it, perhaps in the mid-$300-million range.
Developers have found it challenging in recent years to find lenders willing to fund condo projects. Even though the housing market has been recovering, condo prices are still a bit low to justify new construction in most neighborhoods.
Beverly Hills, with its international cachet, is different, real estate broker Laurie Lustig-Bower said. “We are severely under-supplied for high-end condos in Beverly Hills,” she said. Condos in the nearby Montage have sold for more than $10 million.
Lustig-Bower’s international property brokerage, CBRE Group Inc., is marketing the property with Savills, a London real estate services firm.
“We think there is a high probability the new owner will be from overseas,” Lustig-Bower said. Investors from Europe, the Middle East and especially Asia are likely buyers, she said.
The top selling point of the property is that previous owners successfully navigated Beverly Hills’ arduous city planning process and secured approvals to build a condo complex designed by Richard Meier, architect of the Getty Center.
“Upon transfer of ownership, the incoming buyer will leverage the value already created and be able to immediately commence construction — a truly rare circumstance in the highly regulated and supply-constrained city of Beverly Hills,” the selling brokers said in a statement.
Meier’s design includes underground parking for 876 cars and nearly 21,000 square feet of shops and restaurants.
Condominiums at 9900 Wilshire could be sold to buyers from around the world, many of whom would probably have residences in other cities as well.
“I think we’ll see a lot of local interest too,” Lustig-Bower said.
Joint Treasure bought the property in 2010 in a private auction from Banco Inbursa, a bank controlled by Mexican billionaire Carlos Slim. The bank took possession of the property that year after completing foreclosure proceedings against CPC Group, which was operated by jet-setting British developers Nicholas and Christian Candy.
The Candys made headlines in 2007 when they bought the parcel for $500 million in one of the largest transactions in the history of Los Angeles County. The seller, New Pacific Realty Corp. in Beverly Hills, paid $33.5 million for the property three years earlier.
New Pacific created the plan that called for razing the empty department store and building a $500-million, ultra-luxury condominium and retail complex designed by Meier. Joint Treasure said it would follow through with the same basic plan but never started construction.
Beverly Hills is experiencing a surge in investment, said real estate broker Jay Luchs of Newmark Grubb Knight Frank. Rodeo Drive is fully leased for the first time in years, and nearby Beverly Drive is attracting more top-end national and international fashion retailers.
“Owners of these companies want to buy houses here,” he said “Their CEOs and important people want to be here.”
The growing commercial property demand has helped raise residential prices, Luchs said.
“Everything changed over last five or seven years — $5 million is nothing now,” he said. “The best homes are $15 million to $20 million or more.”