The Hollywood & Highland shopping and entertainment center has been acquired by a real estate partnership that plans to renovate the property, which opened in 2001 and helped lure investment back to the iconic neighborhood.
San Jose real estate company DJM and Gaw Capital USA, the U.S. arm of a Hong Kong private equity firm, announced the purchase Monday. The group bought the center from Los Angeles company CIM Group for an undisclosed amount. The sale does not include the complex’s Dolby Theatre, where the Oscars are held.
In a news release, DJM and Gaw Capitalsaid renovations at the 7.6-acre site would start next year and finish in 2021.
Even though the parties would not reveal its price, they described it as the largest sale of retail space outside Manhattan since early 2017, when a Las Vegas shopping center sold for $389 million. El Warner, an executive vice president with commercial brokerage Colliers International, called it a vote of confidence in marquee retail locations and the Hollywood market.
Warner said it could spur additional retail and multifamily investment nearby, continuing a multiyear flood of investment into the area.
“Whenever a large amount of money is placed into a market that’s a sign of investor confidence,” said Warner, who was not involved in the deal.
DJM and Gaw Capital didn’t provide many specifics on renovations but said they would upgrade common areas and incorporate “new concepts and uses that bring excitement to retailers, visitors and other tenants at the property.”
Stenn Parton, chief retail officer at DJM, declined to reveal specific tenants that the group wanted to bring into the 463,000-square-foot complex, which is now home to national brands like Johnny Rockets, Foot Locker and Guess. He said the goal was to take the retail and restaurant offerings to the “next level” and attract tenants that have global appeal but also reflect Los Angeles.
Given the declining state of traditional retail storefronts, some space will be converted into offices and the partnership will boost the number of events at the center — many of which will revolve around music, art and food, Parton said.
“We think what is lacking today is an experience that is worth spending your time,” he said. He wants to make the center an attraction like the Hollywood Walk of Fame, the Hollywood sign and the TCL Chinese Theatre. “We think there is a massive opportunity to live up to the same allure of those three landmarks.”
The Hollywood & Highland complex was meant to reinvigorate gritty Hollywood Boulevard and was backed by a mix of public and private money. But the project was a financial debacle for its original owners, Chicago-based Trizec Properties Inc.
Cost overruns and delays drove up the price. The complex opened to mixed reviews, toward the end of a recession and amid uncertainty following the September 2001 terrorist attacks.
Japanese tourists who had been expected to buy luxury goods in the center’s fanciest stores stopped traveling, and several tenants failed. Locals complained about the high cost of parking, and many chose to patronize the nearby Grove instead.
Even so, the project did help spur other investments nearby, including the creation of a studio where “Jimmy Kimmel Live!” is taped.
In 2004, CIM purchased the property for about $200 million, less than a third of its onetime valuation of nearly $650 million. In 2012, CIM sold a hotel at the center and a year later recapitalized Hollywood & Highland with the Abu Dhabi Investment Authority.
Warner, who appraised the project when CIM purchased it, said the Los Angeles firm helped make the center popular with locals, as well as tourists.
In a news release, CIM said it had made “significant enhancements” to the Dolby Theatre, the hotel and the retail and entertainment center.
“CIM’s repositioning of Hollywood & Highland increased its visibility and provided a stable anchor for the resurgence of Hollywood,” CIM principal Shaul Kuba said in a statement.
The new renovations at Hollywood & Highland won’t be the first in the neighborhood for Gaw Capital Principal Goodwin Gaw, who owns the historic Roosevelt Hotel across the street.
Times staff writer Roger Vincent contributed to this report.