By ELIZABETH HAYES
Santa Monica's Third Street Promenade, San Diego's Gaslamp Quarter, Old Pasadena, downtown Brea and Hollywood Boulevard.
What these seemingly disparate shopping districts have in common is a Westwood real estate firm that over the past four years has quietly built a small retail empire.
Since CIM Group LLC started collecting buildings in rundown but reviving areas, it has amassed a portfolio of more than $200 million worth of property encompassing over a million square feet. The firm is the largest landlord on the Third Street Promenade, with 13 buildings and 203,000 square feet of existing properties and others under development.
"These guys have incredible vision to pick properties. They know how to identify opportunities and create value," said broker John Bertram with Westmac Commercial Brokerage Co., who has represented CIM in several deals.
CIM's principals and founders, Avi Shemesh, Shaul Kuba and Richard Ressler, have established a reputation for jumping into markets on the verge of an upswing.
"They get in on the ground floor, after things have started, and push the momentum," said Matthew May, a retail broker at Madison Partners. "They know their exit strategies they're not going to take the risk and hope it's going to work."
When CIM first bought on Third Street, rents were $1.50 to $2 per square foot a month. Today, they're in the $6 range.
So who are these guys who seem to have a Midas touch for picking properties?
Shemesh and Kuba were friends growing up in Israel who emigrated to Los Angeles in 1986. A year later, they formed Dekel Development Inc., which developed more than $60 million worth of commercial, apartment and condominium projects.
Shemesh also formed AA Landscaping, which is how he hooked up with Ressler, an attorney by training who worked in Drexel Burnham Lambert's corporate finance and mergers-and-acquisitions department and later served as chief executive of various companies. Shemesh's company did landscape work at Ressler's house and the two talked about doing real estate deals together.
(CIM does deals with its own capital, as well as through partnerships with Federal Realty Investment Trust of Maryland and Credit Suisse First Boston Mortgage Capital LLC.)
In 1994, CIM Group made its first purchase five stores on the Third Street Promenade, where a few theaters and restaurants had emerged but retail was still struggling with mom-and-pop-type stores. The goal has been to attract tenants by creating the same kind of predictable environment that exists in enclosed malls, where tenants deal with one landlord and predictable rules.
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