Beverly Grove-based Cedars-Sinai Medical Center has acquired the 340,000-square-foot Beverly Connection shopping center one block east of the medical campus for a reported price of $270 million.

The seller was New York–based retail property owner Ashkenazy Acquisition Corp., which has owned the shopping center since 2014. Ashkenazy Acquisition was founded by real estate developer Ben Ashkenazy.

In its March 13 announcement of the acquisition, Cedars-Sinai said it had no near-term plans to close the shopping center. The medical center said it will take time to plan its future use of the roughly 10-acre site at 100 North La Cienega Blvd., on the east side of the street between Beverly Boulevard and Third Street.

“The strategic acquisition of the Beverly Connection will provide long-term options for Cedars-Sinai to revitalize our medical campus and provide the most advanced care to our patients and the community well into the next century,” Peter Slavin, chief executive of Cedars-Sinai Medical Center and of the broader Cedars-Sinai Health System, said in the announcement. “We are excited by this opportunity to shape the future of health care in Los Angeles and leave an enduring mark on the city’s wellbeing for generations to come.”

A spokesperson for Cedars-Sinai said the hospital had no further comment on the transaction, and a spokesman for Ashkenazy Acquisition declined to comment altogether.

The acquisition values the Beverly Connection shopping center at about $790 per square foot, according to the Real Deal, which first reported the sale price.

Chris Maling, principal of retail capital market at the downtown Los Angeles office of Toronto-based Avison Young Inc. said he was familiar with the deal and that the transaction was off-market – which means there was no formal listing of the shopping center being up for sale.

Another twist

The Beverly Connection, which opened in 1989, has been considered a community-oriented shopping center. That’s unlike its more
well-known Beverly Center mall neighbor across La Cienega.

From the beginning, it had an unusual combination of formats, with several stores fronting outdoor walkways on three interior levels and on the north side, a small indoor mall. There are even stores on the southwest corner that open to a parking lot next to the street, as does a CVS Pharmacy store at the northwest corner.

The center was initially anchored by a Ralphs Grocery Co. market and a Cost Plus store. A few years later, a cinema complex was added.

But in 2007, the center underwent a significant renovation that resulted in the cinema being removed.

In 2014, Ashkenazy Acquisition bought the center for $260 million. Around that time, the parking structure was modernized, though the design of a big ramp in the center of the above-ground portion remained. The parking structure’s design and congestion is still a common gripe in the neighborhood. “Parking is an ongoing issue for customers,” Maling said.

The current tenant list includes a Target store on the top floor, Nordstrom Rack, T.J. Max, Marshalls and Saks Fifth Avenue Off Fifth.

Beverly Connection’s challenges

Like all shopping centers, the Beverly Connection was hit hard by the Covid-19 pandemic, Maling said.

The center has also had to contend with its much bigger and well-known neighbor on the west, the Beverly Center, which underwent a $500 million renovation that wrapped up
in 2018.

Maling said the Beverly Connection has faced a series of financial challenges in recent years.

“This center has been in and out of special servicing with the CMBS (Commercial Mortgage-Backed Securities) debt and has been re-worked many times over the last few years,” he said. “That means they had either been delinquent, violated loan covenants or had a maturity default – or some combination thereof.”

The Real Deal reported last year that Morningstar Credit had valued the Beverly Connection property at $193 million in December 2024, down from $260 million at the time of Ashkenazy Acquisition’s purchase. The publication also noted that an Ashkenazy Acquisition spokesman disputed this figure, citing another valuation in excess of $300 million.

Last week, the Real Deal reported that Ashkenazy Acquisition had recently extended a maturity date for $175 million in debt connected to the Beverly Connection to this coming July.

Busy in Beverly Hills

In the meantime, Ashkenazy Acquisition has been busy assembling a retail real estate empire in the nearby Golden Triangle of Beverly Hills. Back in 2001, the firm purchased the Barneys New York site on Wilshire Boulevard. Several other purchases followed, culminating in this past December’s acquisition of the Neiman Marcus property that spans two blocks in the Golden Triangle. That property was owned by New York-based Saks Global, which filed for Chapter 11 bankruptcy protection in January.

This acquisition has made the firm the largest single premier retail landlord in Beverly Hills, according to an Ashkenazy Acquisition press release on the Neiman Marcus transaction.

Maling said that it’s conceivable that Ashkenazy Acquisition is using the proceeds from the Beverly Connection sale to fund the purchase of the Neiman Marcus site. Despite the three-month timing gap, he said this could be achieved through a so-called reverse exchange. That allows for a 180-day window to fund a property purchase through the proceeds of the sale of another property.

Cedars-Sinai’s search

Cedars-Sinai emerged in the 1960s through the combination of Cedars of Lebanon Hospital in East Hollywood and Mount Sinai Hospital in what’s now called the Beverly Grove neighborhood. In the 1970s, a new hospital campus emerged on the 8700 Beverly Blvd. address that had been occupied for a few years by Mount Sinai Hospital.

In the ensuing decades, Cedars-Sinai Medical Center has grown into the largest nonprofit hospital in the west, with 915 licensed beds, well over 1,000 physicians and 10,000 nursing staff and other employees. The ever-expanding hospital eventually pushed beyond the constraining boundaries of the original campus, snapping up nearby parcels and buildings.

Cedars-Sinai has long had other off-campus facilities, including a breast services building at 310 N. San Vicente Blvd., an outpatient services building at 444 S. San Vicente Blvd. and administrative office space at 6500 Wilshire Blvd. along the Miracle Mile.

The pressure to expand has not been just for hospital-related facilities. Most of the physicians who have practicing privileges at the hospital have their own outpatient offices, requiring ever-growing amounts of medical office space. And adjacent Beverly Hills, with its cachet, has been one of the major magnets for this growth.

But over the last couple decades, resistance has mounted in Beverly Hills to this relentless quest for more medical office space. In 2011, the city passed an ordinance effectively capping the addition of new medical office space. The cap was lifted temporarily during the pandemic. In recent months, there’s been an effort to ease up on the cap, particularly for conversions of ground floor retail to medical office space.

At a recent Beverly Hills City Council meeting, there was significant opposition from the public and from councilmembers to easing the cap, the Beverly Hills Courier reported.

One of the few speaking in favor of lifting the cap was Susie Herrera, associate director of government and industry relations for
Cedars-Sinai.

“Today, the need for care in the community is growing faster than our ability to meet it within the city’s current land use framework,” Herrera said, according to the Courier. “Pediatric primary care appointments now average a three-week wait, and geriatric care often exceeds one month. With an aging population and rising demand for accessible, high-quality care, these pressures will only continue to increase. For this reason, we’re seeking to expand our services and footprint in Beverly Hills.”

Facing these limits in Beverly Hills, Cedars has been forced to look at other adjacent neighborhoods.

On another front, Cedars has been pushing to expand its medical research capacity and training for health care professionals. In late 2024, Cedars set up a health sciences university. At that time, Cedars-Sinai was already hosting more than 315 graduate students and postdoctoral scientists and 540 medical residents and fellows. Plans to grow this university within Cedars will put even more pressure on the hunt for additional space.

Maling said that Cedars-Sinai representatives have approached him several times in recent years asking to bring Cedars-Sinai opportunities around La Cienega Boulevard and in adjacent West Hollywood.

“They are looking to assemble real estate for future growth and expansion,” he said.

Deliberate approach to growth

While Cedars-Sinai is facing enormous pressure to grow its physical facilities, the approach is being characterized as slow and deliberate. In the announcement of the Beverly Connection acquisition, the frame of reference was cast in terms of decades.

“Cedars-Sinai is planning for the future much the way its predecessors at Cedars of Lebanon and Mount Sinai did more than seven decades ago, taking a strategic approach to the eventual uses of the Beverly Connection site,” the announcement said.

“The Beverly Connection is a prime location that deserves thoughtful planning to ensure we best meet the needs of Los Angeles and beyond for decades to come,” David Wrigley, executive vice president of Finance and chief financial officer for Cedars-Sinai Health System, added in the announcement.

A spokeswoman said no further details would be provided at this time on the nature of the redevelopment of the Beverly Connection site or a timeline.

That’s unlike many large real estate purchases made by hospitals, where a specific use and/or project has already been planned at the time of the purchase.

Maling summed up this approach as, “patient investment for future growth.”