Passco Buys The Promenade for $95 Million
Irvine, Calif.–based real estate firm Passco Real Estate Enterprises Inc. paid $95 million to purchase The Promenade at Howard Hughes Center, the 247,833-square-foot entertainment and retail center near the Fox Hills area of Los Angeles.
Passco bought the property from co-developers J. H. Snyder Co. of Los Angeles and Chicago-based ORIX Real Estate Equities, which opened the center in 2001. The Promenade, one of the most visible shopping centers in Los Angeles, displays its neon signage off Interstate 405, near the adjacent Westfield Fox Hills shopping center and the Los Angeles International Airport.
The area has recently seen an influx of residential real estate with the continued development of Playa Vista, a 1,100-acre community that is still under construction. The new residential element has built up a growing base of shoppers looking for upscale goods. Most of the homes at Playa Vista are priced at $700,000 and up. The average household income in the area is $90,000, according to Passco.
The center also has a strong daytime clientele, thanks to a 2.4 million-square-foot office campus operated by Arden Realty. The Howard Hughes office campus includes headquarters for Spanish-language television studio Univision Communications Inc.
At The Promenade, 92 percent of retail tenants are either national or regional operators. The Bridge Theaters, an 18-screen complex with a state-of-the-art IMAX theater, anchors the center. Other tenants include Nordstrom Rack, Borders, Hi Fashion and Nilar Collection.
Passco executives said they plan to improve exterior and parking lot signage as well as add amenities to the courtyard and common areas.
“We are particularly pleased to add The Promenade at Howard Hughes to our retail portfolio,” said Paul Mittmann, Passco’s vice president of acquisitions. “The center has ideal freeway access to the 405, very desirable consumer demographics and the kind of residential density that high-end merchants are looking for.”
The center will be offered as an investment for 1031 tenant-in-common investors, which will allow groups of individual investors to reinvest the sales proceeds of the commercial property into an institutional-grade real estate asset without incurring tax liability.
Passco operates about 20 shopping centers in the West, including the Puente Hills Mall and The Village at Orange (formerly The Mall of Orange). —Robert McAllister
