Bank to take prime commercial property in Beverly Hills
British developers had paid $500 million for the site of the former Robinsons-May on Wilshire Boulevard in 2007. They had planned to develop condominiums and a hotel on the eight-acre parcel.
By Roger Vincent, Los Angeles Times
6:53 PM PST, February 18, 2010
Jet-setting British developers are set to lose their prized real estate on a prime stretch of Wilshire Boulevard in Beverly Hills on Friday as a bank controlled by Mexican billionaire Carlos Slim completes a foreclosure.
The property slipping away from brothers Nicholas and Christian Candy is the site of the former Robinsons-May department store at 9900 Wilshire Blvd., next door to the Beverly Hilton Hotel at the boulevard's intersection with Santa Monica Boulevard.
The Candy brothers, who planned to develop condominiums and a hotel, made headlines in 2007 when they bought the eight-acre parcel for $500 million. The jaw-dropping sum made the transaction one of the largest in the history of Los Angeles County.
Local real estate observers had trouble making sense of the price because the seller, Beverly Hills-based New Pacific Realty Corp., had paid $33.5 million for the property three years earlier. The Candys, though, had a track record of building super-premium residences for the mega-wealthy.
"Candy & Candy in the U.K. is what Tiffany is to jewelry here," Laurie Lustig-Bower of brokerage CB Richard Ellis said at the time. "Therefore, they believe they will achieve record prices for their condos."
But the real estate market has changed dramatically for the worse in recent years. Still, Lustig-Bower said Thursday, "I do believe that this is a great piece of real estate."
Now, Christian Candy's CPC Group is in default on a $365.5-million loan from lenders controlled by Slim's Banco Inbursa, according to court documents.
A subsidiary of CPC Group is expected to transfer title to the lenders Friday, sources told Bloomberg News. Nicholas Candy confirmed in an e-mail that he expected to relinquish title to the site Friday.
CPC Group is best known for One Hyde Park in Central London, where buyers of the expensive flats included Russian oligarchs, oil barons, Saudi princes and A-list movie stars, according to the English press.
When they bought the Beverly Hills property, the Candys said they would proceed with the previous owner's plans to raze the empty department store and build a condominium and retail complex designed by Richard Meier, architect of the Getty Center.
The city approved the project in 2008. Later that year, with condo sales stalling and financing sources drying up, the Candys said they hoped to incorporate a five-star hotel into the design by eliminating some of the 235 approved condos.
Fortress Said to Need $150 Million to Keep Resorts
February 19, 2010, 09:46 AM EST
By Cristina Alesci, Bloomberg
Feb. 19 (Bloomberg) -- Fortress Investment Group LLC may have to contribute at least $150 million to Intrawest ULC, the owner of the Olympics’ Alpine skiing venue it bought in 2006, to avert bankruptcy or foreclosure, according to a person with knowledge of the negotiations.
Intrawest’s creditors yesterday postponed an auction of the company’s assets by one week to Feb. 26. The deal, which avoids a sale of the owner of the Whistler Blackcomb skiing center during the Winter Games, doesn’t address creditors’ demands that Fortress add equity to Intrawest, said the person, who declined to be identified because talks were private.
Lehman Brothers Holdings Inc., Davidson Kempner Capital Management LLC and Oak Hill Advisors LP are in a group of lenders seeking control of Intrawest after the company missed final payment on a $1.4 billion loan in December. Intrawest struggled under a debt load even after layoffs and expense cuts. The lenders’ administrative agent, Wilmington Trust FSB, had initially slated an auction for today that also included stakes in Mont Tremblant in Quebec and Stratton Mountain in Vermont.
“They negotiated a reprieve but it’s still a black eye,” said Steven Kaplan, a professor at the University of Chicago Booth School of Business who studies buyouts. “Investors are being asked to throw more good money after bad, which they can’t be happy about.”
Lilly Donohue, a spokeswoman for New York-based Fortress, declined to comment. Kimberly Macleod, a spokeswoman for Lehman, also declined to comment.
Equity Marked Down
Investors in Fortress’s Fund IV, Fund IV Co and FICO funds saw their collective $1.7 billion equity stake in Vancouver- based Intrawest reduced to 4 cents on the dollar as of Oct. 31. Two of the funds put in an additional $345 million in October 2008 to keep lenders at bay and infuse cash into the company.
Fortress fell 1 cent to $4.18 at 9:37 a.m. in New York Stock Exchange composite trading. It has dropped 6.1 percent this year, compared with the 1 percent decline by the Standard & Poor’s 500 Index.
“Although the investment has already been written off, they’ll likely have to repair relationships with some investors that have particular exposure to Intrawest in their funds in order to raise more money from them,” Roger Freeman, a Barclays Capital analyst, said in an interview.
Ski and Golf
Booth Creek Ski Holdings Inc., which operates resorts in Northern California and New England, isn’t interested in buying Whistler, said Julie Maurer, vice president of marketing and sales.
Intrawest, founded in 1976, runs ski and golf resorts in Canada and the U.S. It sells vacation timeshares through its Club Intrawest unit and owns Canadian Mountain Holidays, the world’s largest heli-skiing operation, according to its Web site. Heli-skiing runs are reached via helicopters rather than ski lifts.
The potential sale of the resort hasn’t been an issue for the athletes during this week’s competition, said Chris Rudge, chief executive officer of the Canadian Olympic Committee in Vancouver.
“For athletes, the Whistler experience has been tremendous,” Rudge said in an interview. “They’ve built a great village up there. No realistic individual would believe that anyone engaged in a business auction would step in and interrupt the Games.”
Intrawest has been selling some of its smaller resorts to pay down debt. Those sales, including Panorama Mountain Village and Sandestin Golf and Beach Resort, will raise about $65 million, according to the person. Intrawest agreed in November to sell its interest in Copper Mountain for about $100 million to Powdr Corp. of Park City, Utah.
“An auction at this point is unlikely,” said Daniel Fannon, a San Francisco-based analyst at Jefferies & Co. Fortress wants “to maintain a level of control for when times are better again,” he said.
--With assistance from David Scanlan and Christopher Donville in Vancouver and Nadja Brandt in Los Angeles. Editors: Josh Friedman, Larry Edelman
To contact the reporter on this story: Cristina Alesci in New York at +1-212-617-2000 or Calesci2@bloomberg.net.
To contact the editor responsible for this story Christian Baumgaertel at +1-617-210-4624 or firstname.lastname@example.org