Gucci Building On Rodeo Drive Changes Owner
31 Jan, 2007, Beverly Hills, CA
Flagship Location of Luxury Brand Store Trades for $40 Million
Los Angeles-based Festival Companies has acquired 347 Rodeo Drive, Beverly Hills, the premier West Coast location of Gucci America, one of the world’s leading luxury brand companies. Steve Algermissen, Andrew Harper and Leslie Mayer from Cushman & Wakefield and Jay Luchs from CBRE represented New York-based Friedman Equities, the seller, in a transaction valued at more than $40 million. The seller will retain a minority interest in the property. The buyer, Festival Retail Fund #1, LP, a venture between The Festival Companies and Goldman Sachs, represented themselves.
The three-story 13,533-square-foot building is one of Gucci’s two flagship locations in the United States and has served as the firm’s most important West Coast location for more than 20 years. The building is located on the most desirable block of Rodeo Drive in the heart of the “golden triangle” of Beverly Hills.
“When we saw the opportunity, some time ago, to acquire an asset of this quality in the middle of the best block on Rodeo Drive and with a household-name tenant, we knew we had to drop everything else we were doing and act quickly,” says Matthew Joblon, managing director at Friedman Equities. According to Luchs, a commercial leasing broker for high-end retail locations in Beverly Hills, rents on Rodeo Drive have increased at a dizzying pace over the past two-three years from less than $300 per square foot to more than $500 per square foot in the most recent transactions.
“There are still large amounts of capital seeking high-quality investments in attractive markets. Southern California with its decreasing vacancies and accelerating rental rates continues to offer one of the best investment opportunities in the U.S.,” says Steve Algermissen, a senior director from Cushman & Wakefield’s Los Angeles Downtown office.
In a marketplace first, Friedman Equities assembled what they thought was the “dream team” of brokers, marrying the top investment sales team in the market from Cushman with a top leasing agent on Rodeo Drive from CBRE. "To truly do this property justice, I thought it was essential to combine the best leasing agent in the marketplace with the best investment sales team in the marketplace, regardless of what firm they worked for," says Peter Friedman, chairman and CEO of Friedman Equities.
Gucci America, Inc. is a division of Gucci Group N.V., one of the world’s leading multi-brand luxury goods companies. Labels under this umbrella include, apart from Gucci, Yves Saint Laurent, Bottega Veneta and Sergio Rossi, all of which have separate presences on Rodeo Drive as well.
Friedman Equities LLC is a real estate investment and development firm with offices in New York and Los Angeles. The firm specializes in opportunistic investments, primarily located in Southern California in the high-end residential, retail and hospitality sectors and is currently working on projects in Rancho Mirage and Beverly Hills.
Launched on January 1, 2007, Festival Retail Fund #1, L.P. is a retail real estate investment fund formed by Los Angeles-based The Festival Companies. Managed by The Festival Companies’ Principals Mark Schurgin and Rosalind Schurgin, Festival Retail Fund #1 invests in ground-up and existing retail properties including regional malls, lifestyle centers, power centers, community and strip centers and stand-alone buildings. The Fund will invest up to $800 million by the end of 2009.
Los Angeles-based The Festival Companies is Goldman Sachs’ retail development and investment partner. A national, full-service retail development and third-party management company, The Festival Companies has developed and/or added value to more than 110 diverse retail properties nationwide over the last 25 years.
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Cushman & Wakefield is the world’s largest privately held real estate services firm. Founded in 1917, the firm has 195 offices in 55 countries around the globe, and 11,000+ talented professionals. Cushman & Wakefield delivers integrated solutions by actively advising, implementing and managing on behalf of landlords, tenants, and investors through every stage of the real estate process. These solutions include helping clients to buy, sell, finance, lease, and manage assets. C&W also provides valuation advice, strategic planning and research, portfolio analysis, and site selection and space location assistance, among many other advisory services. To find out more about Cushman & Wakefield, please call 1-213-955-5100, or visit the firm’s Web site at www.cushmanwakefield.com.
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