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September 20, 2019
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LOS ANGELES COUNTY NEWS
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Partnership Between DJM and Gaw Capital USA Buys Hollywood & Highland Retail Center from CIM Group

8/06/19

Hollywood & Highland, the 460k sf retail and entertainment center located at 6801 Hollywood Blvd, in the heart of Hollywood’s tourism and business district, was acquired by a venture between private equity real estate firms DJM and Gaw Capital USA. The sale does not include the iconic Dolby Theatre at Hollywood & Highland, the 180k sf, 3,400-seat live-performance auditorium outfitted with cutting-edge technologies to accommodate a variety of programming.

Although a value for this transaction was not provided, when the asset was originally put on the market at the end of 2018, some industry pros suggested the property would fetch around $300 mil. Although, from what we’ve heard, the final deal was actually higher, closer to $325 mil.

The property, constructed in 2001, was sold by CIM Group, which purchased the complex in 2004 for around $200 mil, a dramatic write-down for the project’s original developer, Trizec Properties which at one time had valued the asset at well over $600. CIM Group’s acquisition included the retail and entertainment center, the theatre and the adjacent 632-room hotel.

The new owners plan to reimagine the 7.6-acre site over the next 24 to 30 months. Built in 2001, the project sits at the crossroads of Hollywood Blvd and Highland Ave, and adjacent to the acclaimed TCL Chinese Theater.

The buyers will upgrade the retail hub and focus on rebranding, upgrading common areas with an eye to creating more desirable gathering and programming spaces, ramping up entertainment events, optimizing the merchandise mix and incorporating new concepts and uses that bring excitement to retailers, visitors and other tenants at the property.

Under its ownership, CIM made significant enhancements to each of the components that cemented the property as a destination with domestic and international prominence, serving the local community, while engaging visitors from the surrounding communities as well as around the world. CIM sold the hotel to Loews Hotels & Resorts in 2012 for $165 mil, and in 2013 recapitalized the retail and entertainment center in a new CIM-managed joint venture.

CIM will continue to operate the Dolby Theatre, which hosts the annual Academy Awards®. In 2012 CIM executed a new 20-year contract with the Academy of Motion Picture Arts & Sciences to maintain the annual Academy Awards® in Hollywood at Dolby Theatre – the centerpiece of Hollywood & Highland. Concurrently, CIM reached a 20-year agreement with Dolby Laboratories to name the Dolby Theatre. Most recently, CIM entered into a programming arrangement with the historic Hollywood Pantages Theatre to bring Broadway shows to Dolby Theatre expanding Dolby Theatre’s existing array of programming that includes live television productions, movie premieres, concerts, cultural, civic and arts events.

Gaw Capital USA is a Hong Kong and Los Angeles-based real estate private equity firm led by Goodwin Gaw, Chairman and Managing Principal of Gaw Capital Partners. Gaw previously acquired and redeveloped the Hollywood Roosevelt Hotel in 1995, just one block away from Hollywood & Highland. Based in San Jose, DJM is a nationwide commercial real estate developer and asset manager with decades of experience in the Southern California market.

Jerry Tang and Greg Murphy at Natixis put together the financing package, which included an acquisition loan along with a future funding component.






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