Wilshire Rodeo Plaza sits at one end of Rodeo Drive and its new owners are betting big the address on Beverly Hills’ iconic street will lure luxury retailers.
Justin and Tyler Mateen, along with their brother-in-law Pouya Abdi, paid more than $208 million for the property in a deal that closed earlier this week. They bought from investment firm Nuveen, which had owned it since 2006.
The property, which spans the 100 block of Rodeo Drive, includes an underground parking garage and four buildings with ground-floor retail space and office space on the upper floor. Although most of the office space is occupied by tenants that include Merrill Lynch and Bank of America, the brothers said in a joint interview Wednesday the purchase was driven by a plan to fill more of the space with high-end retail tenants.
“Most of the value in this property and the reason that we’re buying it is in that high-end retail,” Justin Mateen said. “There’s untapped potential in the building, and at the same time, there’s a tremendous amount of need from these luxury tenants.”
Their strategy underscores the strength of the retail real estate market in the greater Los Angeles area that boasts a roughly 94% occupancy rate, according to real estate firm Colliers. By comparison, office space, which has struggled to regain its footing following the devastating impact of the COVID-19 pandemic, is just 76% occupied.
In Beverly Hills, the vacancy rate for office space climbed from 20.6% in the first quarter of the year to 23.8% in the second quarter, according to Colliers.
Justin Mateen, who co-founded the dating app Tinder in 2012, said he and his brothers plan to nearly double the retail footprint of the complex by converting office space on the second story.
Conversations with potential tenants interested in moving to Wilshire Rodeo Plaza from spaces they currently occupy elsewhere on Rodeo Drive are ongoing, Tyler Mateen said. He said he believes the property is appealing because of its parking garage and the relative privacy it offers from gawking tourists, he said.
“What we’re seeing is luxury tenants are moving,” Justin said. “They want a larger footprint, so that’s our focus.”
The complex currently houses only one retailer, designer brand Vera Wang.
The brothers said they plan to rebrand the property as “One Rodeo” and to give it a facelift, focusing on the buildings along Wilshire Boulevard and Rodeo Drive.
“It’s a little out of date,” Abdi said. “We do plan on upgrading the facades of the buildings to really continue the look and feel of Rodeo Drive.”
Famous for its uninterrupted string of luxury stores like Chanel and Balenciaga that draw wealthy shoppers, tourists and paparazzi-hunting celebrities, Rodeo Drive is Beverly Hills’ defining attraction.
The sale of the property was first reported by the Wall Street Journal.
The new owners said they’re also looking into ways to use the property’s rooftop space, which is currently undeveloped.
People have pitched them on restaurants and members-only social clubs, Tyler said. And they toyed with the idea of a hotel on part of the upper floor, but dismissed it, Abdi said.
“It’s a family project,” Justin said. “We plan to keep it forever, so we’re spending money to really take it to its full potential.”