Falcon Real Estate Acquires Pre-eminent Retail Property on Rodeo Drive
Falcon Real Estate Investment Company, LP is pleased to announce that it acted as real estate investment advisor for the purchase of Two Rodeo in Beverly Hills, California. This property was purchased at a price of $131 million, with a first mortgage being provided by Credit Suisse First Boston.
Located at the intersection of Southern California’s two most recognized thoroughfares, Rodeo Drive and Wilshire Boulevard, Two Rodeo is an internationally recognized landmark and one of the premier retail properties in the world. No other single property in the United States has Two Rodeo’s concentration of the world’s leading fashion and luxury goods tenants. The property’s rent roll includes Tiffany, Versace, Cartier, Gianfranco Ferre, Escada, Porsche Design and Charles Jourdan.
Jack Miller, President of Falcon Real Estate noted that one of the great attractions of this property from an investment viewpoint was the fact that most of the existing leases were negotiated in the early 1990’s when U.S. real estate was experiencing a severe recession. Accordingly, the average annual net rental rate currently in place at Two Rodeo is significantly below the current market rate. Mr. Miller stated, “As leases roll-over during the next several years, we anticipate a significant increase in the net operating income from this property. Not only is Two Rodeo a landmark property, but we expect it be an excellent investment.”
Two Rodeo consists of 130,000 square feet of retail space, which equates to approximately 30% of the total retail space on Rodeo Drive. With four levels of underground valet parking, Two Rodeo has more parking than any other complex in the area.