Hollywood's star finally appears to be rising, and few individuals are prospering more from that rise than Mehdi Bolour, an Iranian-born immigrant who snatched up five commercial buildings in the district for rock-bottom prices between 1985 and 1996.

"The price for properties in Hollywood was always underestimated," said Bolour, who is president of Denley Investment & Management Co. "It was like a dream. It's never going to come back in this way again. Nobody touched it, so I buy it. Now, interest is huge."

Bolour, who moved with his family from Germany to Los Angeles 14 years ago, paid $10 to $40 per square foot for the buildings, with money he had accumulated from a carpet business.

Opinions vary on how much values have risen on and around Hollywood Boulevard. Some commercial real estate brokers already peg property values at $100 per square foot, up from under $40 three years ago. Others put the number closer to $65 per square foot, with estimates rising to over $100 two to three years after TrizecHahn Corp. completes its $385 million retail-entertainment project on Hollywood Boulevard at Highland Avenue in the fall of 2000.

"The retail is going to drive the turnaround and the office will feed off that," said Nick Kanieff, president of Kennedy-Wilson Inc.'s commercial real estate group. "To take Hollywood to the next level, it has to be driven by pushing out the lower-class retail."

Bolour says he's in no hurry to cash out, adding that he won't sell any of his properties for less than $100 per square foot.

"I don't have anything for sale. I would like to wait a little bit," he said, grinning broadly.

Kerry Morrison, executive director of the Hollywood Entertainment District (the area's business improvement district), said some but not all of the families who have owned Hollywood Boulevard properties for generations are ready to sell.

"They feel their time has come. They've weathered Hollywood's cycles and they're ready to reap the rewards of waiting," she said.

But many others are hanging on due to sentimental attachment to the buildings, or until values escalate further.

The primary catalyst of the rising property values is TrizecHahn's project, which will include a 3,300-seat theater to house the Academy Awards, cinemas, shops and a hotel.

Also fanning the property appreciation are other retail-entertainment projects in various stages of development, including renovations of the El Capitan and Egyptian theaters, a planned expansion of the famed Capitol Records building, Regent Properties' office-retail project on Sunset Boulevard, and the expansion/renovation of the Cinerama Dome.

Brokers and property owners also cite the efforts of the business improvement district, under which property owners are assessing themselves to pay for security patrols, street and sidewalk maintenance and marketing.

"All these things have had a ripple effect," said Michael Malick, vice president and partner at brokerage firm Ramsey-Shilling Co.

Improvements to the neighborhood have not gone unnoticed by investors.

Meringoff Equities, which owns retail-office properties on the southeast and southwest corners of Hollywood and Vine that are almost fully leased, says it has been receiving unsolicited offers from both brokers and would-be buyers for the past six months.

"People are calling out of the blue, saying, 'We see what's happening at Hollywood and Vine,' and they're coming up with aggressive prices," said Rob Langer, a partner at Meringoff. "We're not sellers, but the offers are tempting."

Meringoff bought the properties 15 years ago and figured Tinseltown would turn around by 1988. "It took 10 years longer," Langer said. "I've been here the past 14 years and have never seen leasing and investment activity like it has been in the last six months."

Rental rates have climbed for both office and retail space. Average monthly office rents in prime properties have risen from $1.35 per square foot a year ago to up to $1.75 today, Kanieff said.

Langer said he felt fortunate eight months ago to get a tenant who would agree to pay 85 to 95 cents per square foot for space in the historic Taft building at Hollywood and Vine. Now he won't take less than $1.05. A year ago, retail space in the building was leasing for under $1 per foot, but a high-end coffee shop just agreed to pay $1.45, with the rate rising to $1.80 next year and $2.50 the year after.

It's a far cry from a few years ago, when Hollywood was hit particularly hard by the riots, the Northridge earthquake and the real estate recession.

"Hollywood is the last area to see appreciation," said John Bertram of Westmac Commercial Brokerage Co.

Indeed, the overall office vacancy rate for the Hollywood/West Hollywood submarket remains relatively high, at 21 percent, according to Cushman & Wakefield Inc. One major obstacle is the lack of parking behind the older buildings, many of which need sprinkler and earthquake upgrades. But the half dozen or so top-tier buildings already are at least 85 percent leased, Kanieff said.

Bertram predicted that if owners renovate their buildings into first-class office projects, media-oriented tenants would migrate back to Hollywood from the Miracle Mile and elsewhere.

Hollywood Boulevard properties have even starting to attract big-name investors in the last few months. Kennedy-Wilson bought a 160,000-square-foot office building at 7080 Hollywood for around $18 million ($112 per square foot) and plans to invest another $2 million on improvements. And CIM Group LLC, a major property owner on Santa Monica's Third Street Promenade, paid about $13 million ($70 per square foot) for the 184,000-square-foot KB Hollywood Center, across from TrizecHahn's project.

"Being a value-added, opportunistic buyer, finding opportunities is difficult. You have to find the emerging submarkets," Kanieff said.

That's what Bolour did upon arriving in Los Angeles.

"I was always thinking, Hollywood is so famous, getting that much tourists, something must happen. It's not going to stay this way forever," he said. "Now I know I was right."

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