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CIM Group To Redevelop Abandoned Sears in Hollywood

Mid-Wilshire developer CIM Group plans to transform the long-deserted Sears Hollywood site into a mixed-use complex with as many as 700 apartments and more than 300,000 square feet of retail.

Sources said the developer paid $43.5 million, or $8.2 million an acre, earlier this month to acquire the 5.3 acres at 5601-5667 Santa Monica Blvd. between North Wilton Place and North Saint Andrews Place.

The East Hollywood site includes the roughly 100,000-square-foot Sears building, which has been vacant since 2008. It also includes an empty lot and several boarded-up retail properties, one of which used to house a liquor store.

Lately, it hasn’t been uncommon to see a homeless tent or two outside the abandoned properties, though that may soon change when CIM pushes through with its project, is expected to come out of the ground in a year. Sources close to the Buyer say the former Sears building will remain on the site and will be renovated.

The seller, Culver City developer Continental Development Group, acquired the property with plans to break ground in 2009 on a $275 million development with 475 residential units and 380,000 square feet of retail, dubbed Paseo Plaza. However, the development process did not go smoothly. First, it faced community opposition in the form a lawsuit brought on behalf of the La Mirada Neighborhood Association. It was ultimately approved by the city of Los Angeles in 2007, but funding for the project was not available during the economic downturn and Continental never picked it back up again when the recovery began.

If it proceeds as planned, the new CIM development will be a major change for the this long ignored stretch of Santa Monica, which is not far from the sparkly developments on the same street in West Hollywood and just south of several new developments on Hollywood Boulevard.

Good Economic News Signals Rate Hikes Coming Soon

The solid November jobs report released today shifts the big economic question from when will the Federal Reserve raise a key interest rate to how quickly will it go up.

Economists said the solid 211,000 net new jobs added last month makes a long anticipated increase in the benchmark federal funds rate this month virtually a done deal.

The central bank’s policymaking Federal Open Market Committee hasn’t raised the rate in nearly a decade, and it’s been near zero since late 2008 in an effort to stimulate the economy. Fed Chairwoman Janet L. Yellen and others have signaled a small rate hike could come at the committee’s Dec. 15-16 meeting.

Yellen has said the Fed would raise the rate gradually to avoid shocking the economy. The first move is expected to be just a 0.25-percentage-point increase, and Fed policymakers could wait until June to nudge it up by that amount again.

There is talk that if job growth continues to be 200,000 per month, the think the fed funds rate will be higher than 100 basis points a year from now.

Investors were encouraged by the strong jobs report. The Dow Jones industrial average shot up about 250 points in early trading. That followed a 252-point decline on Thursday, after new stimulus measures from the European Central Bank fell short of expectations.

Friday’s jobs report exceeded expectations. Economists had forecast a gain of about 190,000 net new jobs.

The unemployment rate held steady at 5% in November, the lowest level in more than seven years, and it did so for good reasons. About 273,000 people joined the labor force last month, lifting the closely watched participation rate up a bit to 62.5%, though still an historically low level.

For the 12 months ended Nov. 30, hourly wages are up 2.3%, well above the low inflation rate.

The Labor Department revised up job growth for September and October by a combined 35,000. The revisions put October job growth at 298,000, the best month since last year.

Job growth has averaged 218,000 the past three months — and for the 12 months ended Nov. 30, the labor market has added an average of 237,000 net new positions.

The strong housing market was a big factor in November’s job gains. Construction companies added 46,000 net new jobs, the most in nearly two years. Payrolls at restaurants and bars increased by 32,000, while retailers added 31,000 net new positions and healthcare providers added 24,000.

But manufacturers continued to be hurt by the strong dollar, which makes U.S. goods more expensive abroad. The sector lost 1,000 net jobs in November, the third decline in four months. A big factor is the loss of mining jobs because of the drop in oil prices. That sector lost 11,000 jobs in November and has shed 123,000 positions this year. With that said, an interest rate increase in December shouldn’t hurt the industry because it’s been assumed to be coming soon.

But the pace of rate hikes could be a factor if the global economy doesn’t improve. The real question at this point is not so much the first increase but when should we expect the second increase and how much will rates rise in 2016?

Big Changes Coming to Century City, And It’s Not The New And Improved Mall

It’s not just Westfield that is making large investments in Century City. Large marketing firms are vacating space in West Hollywood to set up shop in what was once the 20th Century Fox backlot.

Marketing giant Interpublic Group is moving to Century City and leasing a huge chunk of space that has been vacant since Northrup Grumman moved its corporate headquarters from Los Angeles to Virginia two years ago.

IPG, a New York holding company, signed an 11-year deal for 150,000 square feet at 1840 Century Park East and an adjacent tower, according to brokerage Newmark Grubb Knight Frank, which represented IPG. About 700 employees are relocating to the new space, which real estate experts say the deal is valued at more than $70 million and considered the biggest relocation to Century City since 2004, when CAA mored to 2000 Avenue of the Stars.

Century City is more centrally located for Interpublic’s employees and major clients than its current location at West Hollywood’s Pacific Design Center. It has been said that the new offices also are being redeveloped into “creative” offices with more shared work spaces.

The office space has been vacant since Northrop completed its move two years ago. The deal further proves that Century City, long known as a legal and financial center, is becoming more tied with entertainment as it was so many years ago.