CMC Suitor Finds New Line of Business in L.A. Fashion District
The soon-to-be new owner of the California Market Center, Dr. David Y. Lee of Jamison Properties Inc., may not know a lot about apparel showrooms and fashion shows, but he does know real estate.
Lee, partner of Los Angeles–based Jamison, is in escrow to buy the 3 million-square-foot apparel and gift mart for close to $135 million from current owners Hertz Investment Group and DMG World Media. Escrow is expected to close early in the first quarter of 2005.
While CMC tenants have been speculating on what changes Lee will bring to the Los Angeles Fashion District, the South Korean native brings a strong track record of developing well-run properties and working with tenants.
Lee is well known around the Mid-Wilshire/Koreatown area, where the privately held company owns about 30 properties, mainly office and medical space. It was somewhat surprising for fashionistas to see the real estate executive and medical doctor looking for land at The Intersection, where the CMC meets with The New Mart, Cooper Design Space and Gerry Building.
Jamison, however, has been looking to diversify beyond Koreatown and has ventured downtown, buying the World Trade Center last year. The company is now looking toward Northern California as well as out-of-state for deals. Jamison’s current portfolio features about 70 properties, with market capitalization of more than $1 billion.
Tenants at the CMC said they have been hearing rumors that Jamison will open up the center to jobbers or general office space. Some are hoping Lee can give the center a shot in the arm with more common-area improvements. Others are hoping he will revive buyer incentives, including hotel and air packages, to lure more out-of-town buyers. The CMC is about 60 percent full, as opposed to The New Mart, which is at 100 percent occupancy.
“We’ve heard all kinds of rumors, but I’m impressed with the caliber of property Jamison owns,” said Lynne Girard, a member of the CMC’s tenant board and a CMC showroom owner. “If they maintain it the way they do the other properties, it could be a plus. They obviously have the financing and ability to put money into the buildings.”
Lee has been called the Howard Hughes of the Korean-American business community because he avoids the spotlight. He declined interviews due to the fact that escrow has yet to close. When he is not acquiring real estate, he runs a medical practice in Van Nuys. He sits on the University of Southern California’s Board of Councilors and on the board of the Korean American Museum. He has a medical degree from Northwestern University and a degree in public health and business administration from the University of California, Los Angeles.
His contemporaries said he’s not the type to take properties and flip them for immediate profits. “He’s not a flipper. He’s a syndicator,” said Albert R. Shilton, senior managing director of real estate business Charles Dunn Co. in Los Angeles, which has sold about 10 properties to Jamison. Syndicators generally convey interests in properties to additional investors. In some cases, Lee has been known to lower rents to drive up occupancy.
Fashion District landlords hope that Lee and other Jamison executives are cognizant of the efforts current building owners have made to help the fashion industry grow through efforts such as Los Angeles Fashion Week and The Intersection.
“Our intention is to continue the effort of The Intersection and help preserve the strong presence Los Angeles fashion has gained. These have all been positives for the entire wholesale market,” said Steve Hirsh, principal of the Cooper Design Space.
“[Lee] buys real estate. I hope he realizes the importance of this building. It’s a change for him,” said Steve Needleman, principal of Anjac Fashion Properties.
Mark Weinstein of MJW Investments said it would only be in Jamison’s best interest to work collaboratively with Intersection members. “As a group, you can do more than working individually. It’s a great opportunity to take it to the next level,” he said.
Ethan Eller, manager of The New Mart, said the best thing to do is to welcome and work with Lee and Jamison executives.
