Two Rodeo, a well-known Beverly Hills shopping center that houses some of the world's biggest names in luxury goods, has been bought by Irish investors for $275 million.
Sloane Capital's purchase of the complex at Rodeo Drive and Wilshire Boulevard demonstrates how choice real estate is still in demand even though the recent credit crunch related to sub-prime home loans is sending jitters through the financial and residential real estate markets.
Tiffany & Co., Lalique and Versace are among the upscale stores along a cobblestone path in the outdoor shopping center, which is meant to evoke a small European street. Few changes for shoppers are expected at the complex, which contains the largest single block of retail space in the famed Rodeo Drive shopping district.
"This is clearly an icon among cosmopolitan trophy properties," said Pierre Rolin, chairman of Strategic Real Estate Advisors, the London-based representative of the sellers. He identified them only as a European family trust.
Completed in 1990 at the southern entrance to the Rodeo Drive shopping district, Two Rodeo has entered popular culture as a retail shrine that attracts millions of tourists and other visitors annually.
"It's one of the most-photographed locations in the city," said Thomas J. Blumenthal, president of the Rodeo Drive Committee merchants group, adding that the center "has always represented what we are all very proud of in Beverly Hills."
Although Two Rodeo sits high in the retail firmament now, it had rocky times in the past. It was conceived in the late 1980s real estate boom by San Francisco developer Douglas Stitzel, who spared no expense building the two-story complex that includes a piazza and fountains. He imported the cobblestones from Italy.
After the complex was finished and occupied by Christian Dior, Valentino and other swanky stores, Stitzel sold majority ownership to Japanese investors for an estimated $200 million. But a deep and prolonged recession swept Southern California in the early 1990s, with even luxury shopping taking a beating.
Local wags joked that the most successful tenant at Two Rodeo was the operator of the outdoor coffee cart catering to busloads of tourists who couldn't afford to step inside. Several stores closed and local real estate observers gave the mall's owners some of the blame, saying that they were too cash-strapped to properly manage the property.
