Sold for $500M in 2007, Inimitable Eight-Acre Beverly Hills Parcel Trades for $148.3M

Joint Treasure, a global real estate-focused private equity firm representing major family investors, made the 9900 Wilshire purchase on behalf of three of its consortium partners: Hong Kong's Chow Tai Fook Group, the Wee Cho Yaw Family Group of Singapore and David Chiu of Hong Kong's Far East Consortium International Ltd.

October 6, 2010
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user jonlclark

The eight-acre parcel at 9900 Wilshire Boulevard in Beverly Hills is a prime piece of real estate so desirable that any investor in the world would want it, but, even at a drastically reduced price tag, not just anyone can afford it. However, Joint Treasure International Ltd. has the funds to spare, and just three years after the land traded for $500 million, the firm has picked it up for a relatively paltry $148.3 million.

Joint Treasure, a global real estate-focused private equity firm representing major family investors, made the 9900 Wilshire purchase on behalf of three of its consortium partners: Hong Kong’s Chow Tai Fook Group, the Wee Cho Yaw Family Group of Singapore and David Chiu of Hong Kong’s Far East Consortium International Ltd. “Everyone would agree that this is a one-of-a-kind piece of property,” Daniel Yiu, senior advisor to Joint Treasure, told CPE. “It is well-located, pretty sizeable and it’s fee simple, and that really caught our eye.”

Just how did Joint Treasure come into possession of this immensely desirable parcel that sits at the widely recognized intersection of Wilshire and Santa Monica boulevards and carries the distinction of being the last available commercial lot of its size in Beverly Hills? The firm emerged victorious in an auction administered by Eastdil Secured for Banco Inbursa, one of the lenders that financed Project Lotus L.L.C.’s half-billion-dollar purchase of 9900 Wilshire in 2007, a deal touted as the second largest property transaction in Los Angeles County’s history in terms of dollar value. Lenders had foreclosed on 9900 Wilshire in February of this year after Lotus–a joint venture involving Kaupthing HF and CPC Group, a U.K. property development entity owned by Nicholas and Christian Candy–defaulted on a loan. While Joint Treasure came out on top in the auction, its triumph had not been a sure thing. “We went through a couple of bids and the competition was tough, from what I understand,” Yiu noted.

But the history of shocking price tags attached to 9900 Wilshire Boulevard did not begin with Lotus and Joint Treasure. New Pacific Realty Corporation, which sold 9900 Wilshire to Lotus in 2007, had acquired the property for a measly $33.5 million in 2004. At the time, the site was home to a 1950s-era building occupied by Robinsons-May department store, which ultimately shuttered its doors in 2006. New Pacific had big plans for the parcel. The land had been destined to sprout a 235-unit ultra-upscale condominium development. Those same big plans were in place when Lotus took over ownership. The residential complex was to be a luxury, eco-friendly destination consisting of two LEED Gold-certified structures with the originally planned number of units and 17,000 square feet of retail space amid public and private landscaped gardens. The City of Beverly Hills gave the proposal the green light in 2008.

Joint Treasure’s vision for 9900 Wilshire is just materializing, but the preliminary outline of the project is similar to what New Pacific and Lotus had in mind. “The previous owner already had the land fully entitled, so we’ll try to stick to that plan,” Yiu said. “We plan to build high-end residences because there really aren’t any high-end residential high-rises in Beverly Hills.” And demand for luxury condominiums in the market is on the upswing. Condo and townhome sales in August 2010 increased 20 percent from August 2009 and year-to-date sales are 71.1 percent higher than sales for the same period in 2009, as per a report by Sotheby’s International Realty.

Positive statistics or no, Yiu is confident that a strong market for 9900 Wilshire already exists. “We feel like folks in Beverly Hills like to stick around Beverly Hills, and maybe some will like to get out of their big mansions and get into more convenient, high-security condominiums,” he said. “We will also be catering to those from across the country and worldwide who have business in the Los Angeles area and who may want to have a condo here. Additionally, people from my side of the world talked about Beverly Hills a lot when they were young. It is very special and they have great respect for the name and the place, so if there is ever a chance for them to own a home –a first or second home–in Beverly Hills, they will do that.”

Joint Treasure is already preparing to move forward with the 9900 Wilshire development by putting together a new project management team to oversee the endeavor once company associates return to Hong Kong, Yiu said. “We shall make it high-end, but how high is high? We may not have as deep pockets as the previous owner had, but it will be comparable to Beverly Hills and the other asset we already have here, The Regent Beverly Hills Hotel.”