Dmg Sells California Market Center
By Heidi Genoist -- Tradeshow Week, 1/10/2005
Toronto-based dmg world media has sold its 20-percent stake in the California Market Center in downtown Los Angeles.
According to the deal, which is expected to close early this spring, Jamison Properties will pay dmg and Hertz Investment Group, co-owners of the center, $135 million for the 3 million square foot facility.
Better known for the 300-plus exhibitions and 65 publications it produces around the world, dmg got involved with the market center three years ago when it leased one tower with the intention of turning it into a mart building, said dmg Executive Vice President Fred Barnes.
That objective evolved over time, he added. By 2002, the money dmg had committed for the lease was moved to equity in the entire building, and the company was managing the whole project — apparel, gifts and home furnishings.
Barnes said Hertz has been a good partner; nonetheless, the media company and real estate developer had very different philosophies. "Their objective is to keep their money in the market and capitalize on opportunities, and to do that you have to have good liquidity," he noted. "The building was not on the market, but the offer Jamison made to Hertz made sense. Even though we're running the project, we're just a 20-percent partner, so their influence was stronger than ours."
Dmg is disappointed that it will not get to fulfill the long-term strategic plan it had for the center, Barnes said, since it was making changes the tenants and buyers wanted. The company will stay on until February or March, when the deal closes and Jamison takes over management of the entire project. The change is not expected to have a negative impact on the semiannual, dmg-owned California Gift Shows, which are managed by George Little Management.
In recent years, with dmg's increased involvement in the market center, producers of the tradeshow and semiannual market week had worked together to leverage synergy between temporary exhibits and permanent showrooms, in hopes of driving increased traffic between them.
Barnes said the relationship between the tradeshows and the market center will be negotiated on a case-by-case basis by Dorothy Belshaw, show director for GLM. On the positive side, increased cooperation between the tradeshows and market center competitor L.A. Mart, also in downtown Los Angeles, is more likely.
