Nissani Brothers Auto Group has opened a miniature auto mall in Playa Vista that has four vehicle brands under one roof, an arrangement analysts said is among the first of its kind in the industry.
Brothers Hooman and Rayan Nissani opened the auto mall this summer and had its grand opening late last month, launching four new auto dealerships – Acura, Chrysler/Dodge/Jeep, Hyundai and Nissan.
The Nissani Brothers Auto Mall is in a 128,000-square-foot building on Mesmer Avenue right next to the 405 freeway on a former Albertsons supermarket site. It has 149 service lifts and employs more than 800 people, the brothers said.
A Chevrolet dealership the brothers own in nearby Culver City might also relocate to the facility in coming months, they said. Hooman Nissani said last year he expected the final development to generate $700 million in annual sales.
“We are expecting the auto mall to appeal to multiple demographics with multiple brands,” Nissani said. “With 74 different vehicle models now under one roof, people can come and see the variety and cross-shop between models and variations.”
Nissani said he and his brother first had the idea to sell multiple auto brands together more than a decade ago, when rising land values on the Westside were forcing auto dealerships to close.
The cost of the showroom building and the surrounding car lot for each dealership was just too high to be supported by the vehicle sales volume. Combining auto dealerships to share building and lot space was viewed as a way to lower the cost, he said.
First, though, the Nissani brothers had to find a parcel big enough to accommodate a huge showroom complex and several surrounding car lots. A few years ago, the 9-acre parcel on Mesmer Avenue that had housed an Albertsons supermarket and a CVS Pharmacy became available, and the brothers purchased the parcel for $83 million in June 2016.
Next came what Nissani described as challenging negotiations with the auto manufacturers.
“Generally, auto manufacturers wherever possible prefer to have stand-alone showrooms that reflect the image that the brand wants to project,” said Ryan Kerrigan, managing partner of Kerrigan Advisors, which advises and represents auto dealerships that are put up for sale. “But in this situation, where auto dealerships were closing down because of super-high land costs, the Nissani brothers were able to convince the manufacturers that it’s better to have a presence in a joint facility than no presence at all.”
Kerrigan and Jenny Dudikoff, spokeswoman for the California New Car Dealers Association said it was rare to see a combined dealership operation, particularly in a major metropolitan area in the United States.
– Howard Fine
