LOS ANGELES — California Market Center’s biggest tenant is now one of its owners.
This story first appeared in the February 5, 2003 issue of WWD. Subscribe Today.
Britain-based DMG World Media, operators of the California Gift Show held at the CMC, has purchased a minority stake in the $200 million three-building complex. The size of the stake was not disclosed, however it is believed to be at least 30 percent. DMG is expected to increase the size of its stake in the future.
Under the new partnership, DMG will step up its involvement in the 3 million-square-foot facility, which is currently owned by Hertz Investment Group. The building’s management team, the Dallas Market Center, will scale back its apparel focus and concentrate on gift showroom leasing. George Little Management Co., managers of the California Gift Show on behalf of DMG, will take the lead in marketing gift events.
“All of this is very logical,” said Paul Lentz, CMC’s general manager. “It’s playing to everybody’s strengths.”
Lentz said the building’s 106-member staff will continue to run the day-to-day operations. One priority is promoting the building — which hosts about 20 fashion, accessories and gift trade shows yearly — as an event venue for other types of businesses.
Observers said the move is a natural evolution for trade show producer DMG. “They’re not passive investors, said Carl Muhlstein, senior director of the downtown Cushman & Wakefield. “They’ve been turning it into more of a happening place with aggressive marketing.”
In 2001, DMG signed a lease for 1.1 million square feet of showroom space at the complex, which included a partnership with the DMC to manage the gift showroom build-out and White Plains, N.Y.-based GLM to oversee gift show productions. Since the agreement, the DMC has turned floors nine through 13 of the “C” building into 60 gift showrooms representing 500 lines and there are plans to completely open floors seven and eight by July.
The purchase comes on the heels of last month’s market week, the first to run concurrently with the California Gift Show. Show organizers attribute the success of both trade events to the crossover appeal. A new branding campaign for the building, formerly known as the California Mart, didn’t hurt either.
This is the second time the building has changed ownership in three years. Hertz purchased the landmark in 2000 for $90 million from Equitable Life Assurance Co. With the explosion of interest in downtown properties, real estate sources estimate the building’s worth has more than doubled.
A number of tenants said the new investments have been paying off and welcome the new owners.
“So far, it’s been very positive,” said Ginny Wong, whose self-named showroom is on the fifth floor. “We’re seeing more stores and it can’t hurt that there are gift showrooms as well. We’re starting to see the crossover effect.”