CIM Group Purchases Toys R Us Site in Santa Monica
ANDY FIXMER - 1/28/2005
Los Angeles Business Journal Staff
CIM Group Inc. has purchased the Toys R Us building and a second smaller retail store in downtown Santa Monica, according to John Given, the firm’s development principal.
Sources close to the deal pegged the total transaction value as more than $30 million. CIM paid about $24 million for the Toys R Us building, the sources said.
The two story, 52,250-square-foot Toys R Us building is located at the southeast corner of Fourth Street and Santa Monica Boulevard, and also contains an 8,500-square-foot storefront occupied by retailer Planet Action.
The second property CIM purchased is currently leased to Joann’s Fabrics at 1637 Lincoln Blvd., just south of Colorado Avenue. The 40-year-old building has a 42-spot surface lot.
Toys R Us, which owned the building, is expected to vacate the store by the end of March, as the toy retailer continues to consolidate and cut back on the number of its stores nationwide. Planet Action will remain open, Given said.
Retail broker Matthew May said at the price CIM is paying for the building, the firm would need to collect rents greater than $4.50 a foot – high for that location. Still, he believes buying the building was a smart move.
“They’ll have to achieve a new threshold of rent for that size box, but their timing is great,” he said. “Big box retailers would rather pay a little more and get the (sales) volume than have two stores that have the same traffic. And you don’t get better demographics than Santa Monica.”
The purchase is also a homecoming of sorts for CIM, which cut its teeth developing properties on the Third Street Promenade in 1993, just as the outdoor pedestrian mall took off.
Kathleen Rawson, executive director of the Bayside District Corp. – which oversees downtown Santa Monica – said the purchase demonstrates confidence in the streets flanking the Promenade.
“Second and Fourth streets have taken a long time to come around and we are finally seeing some revitalization there,” she said. “It’s good news they (CIM) are coming in because they are a good, solid company.”
CIM Group was represented by Coldwell Banker Commercial WESTMAC Executive Vice Presidents John Bertram and Luke Palmo, while their colleagues Craig Newlands and Brian Peterson represented Toys R Us.