Shopping Center Business

MAY 2016

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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DJM CAPITAL PARTNERS 264 • SHOPPING CENTER BUSINESS • May 2016 D JM Capital Partners specializes in special properties. The company, which has a knack for acquiring and repositioning undervalued assets, has most recently focused on two oceanfront Orange County, California, retail proper- ties that encountered difficulties under previous owners. "We don't do a lot of deals, but the deals we do typically have incredible val- ue. The locations are irreplaceable," says John Miller, founder and CEO of DJM Capital Partners, which has a current port- folio of more than 2 million square feet. "We have the ability to look carefully and intelligently — and work diligently — to find these opportunities. The com- mon denominator among our properties is the quality of the real estate," he adds. His team sees redevelopment potential in complex real estate and works with stakeholders, including cities, communi- ties and investors, to bring challenging visions to life. PACIFIC CITY DJM Capital Partners spent nearly four years conceptualizing and building the 11-acre retail portion of the Pacific City development, a beachfront project in Huntington Beach, California. Retailers began opening at the 191-000-square-foot property on November 5, 2015, and the project will be fully open by Fall 2016. Another 20 acres of the 31-acre site will contain multifamily and hotel compo- nents. UDR is developing The Residenc- es at Pacific, with 516 apartment homes, slated to come on line in 2017 and R.D. Olson is developing the eight-story, 250- room Pasea hotel, which will open in early summer. DJM's reputation earned the company the opportunity to develop the Pacific City retail property. "It started with our great relationship with the city of Hun- tington Beach, after we developed Bella Terra," says Miller, referring to the 1 mil- lion-square-foot mixed-used project that DJM developed 7 miles from the Pacific City property and launched in 2006. He notes that the previous owners of the Pacific City property invested about $275 million into the site over 12 years before the lender foreclosed and hired Eastdil to sell the note in 2011. DJM bid on the property — but couldn't close in a week whereas New York-based Crescent Heights could. After closing on the property, Crescent Heights met with the city, which recom- mended they call DJM based on its suc- cess with Bella Terra, Miller says. "They closed in November 2011 and by Febru- ary 2012, we had a purchase agreement to purchase the frontage on Pacific Coast Highway." He adds, "Pacific City is an irreplace- able beachfront site that is valued by everyone: by the community, by the city, by locals, by tourists, by people coming down from L.A., and by the investor." The local area also offers demographics attractive to many retailers. "Where lots of beach cities tend to have younger pop- ulations, Huntington Beach has a much broader swath of age groups," says Linda Berman, chief marketing officer at DJM. "There are lots of young people — twen- ty-somethings and young marrieds — but also a lot of retired folks and a lot of still-working mid-range folks in their 30s, 40s, 50s. That is one of the things that appealed to us about Huntington Beach and something we saw every day at Bel- la Terra. You have young people, young families and retirees shopping at the same time. That gives a very solid foundation in your ability to cover product categories, price points and events." Income levels are surprisingly high in Huntington Beach, she adds. In fact, Huntington Beach is ranked third in the U.S. in terms of cities with the highest per- centage of millennial households earning Reading The Market DJM Capital Partners maximizes the potential of complex retail estate opportunities. Randall Shearin and Jaime Lackey Pacifc City in Huntington Beach, California, is a 191,000-square-foot retail center just across the Pacifc Coast Highway from the ocean.

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