C&W Creates Opportunity for Famous but Complicated Asset
AREA Property Partners owned the parcel at Sunset and La Cienega Boulevards (The Tiffany Block), one of West Hollywood's prime locations on the world-famous Sunset Strip. The economy turned, making condominiums and speculative hotels too ambitious for many investors at the time. Cushman & Wakefield suggested leasing The Tiffany Block for the near term to identify retail prospects and create local market buzz.
Gensler was brought onto the team to develop revitalization designs for the site. Despite the poor condition of the existing physical buildings, many potential tenants were extremely interested in this gateway location with a storied Hollywood past. The site was the location of the Tiffany Theater, a premiere movie theater and later revival movie house. The 1960s television show, 77 Sunset Strip, was filmed at the site. Dean Martin’s famous lounge, Dino’s Lodge, had also once been located there. Most recently, it had been home to the Actor's Studio.
The owner was surprised by the level of interest in leasing the property and came to believe that there might be considerable value if the site were to be sold. Confidentiality was of paramount concern and there was a complicated set of existing entitlements that a new owner would be required to navigate with the City of West Hollywood. AREA Property Partners and the buyer had to finesse a joint development agreement to build for-sale condominiums on The Tiffany Block site and a luxury nine-story hotel on the site directly across the street (The Peterson Building).
Cushman & Wakefield's Capital Markets team quietly approached a select group of potential investors and identified a capable buyer in the CIM Group, a real estate investment firm known for transforming urban properties. CIM has a good relationship with the City of West Hollywood, an understanding of the potential for the site, as well as the ability to work through the existing entitlements. CIM purchased both sites in November of 2011 for approximately $40 million.