Before this year, Triple Five Group hadn’t made a blip on the Los Angeles development radar. But two big moves in the last six months have put the developer on L.A.’s star map.
News broke in April that the Edmonton, Canada-based firm was in talks to buy the 47-acre Aerojet Rocketdyne facility in Warner Center for $150 million.
Last month, The Real Deal reported that Triple Five was in escrow with Chinese developer Dalian Wanda Group to buy its One Beverly Hills condo and hotel project.
The One Beverly project is valued at $1.2 billion, meaning that if both sales close by next spring, Triple Five will have dropped $1.35 billion in L.A. in a year.
So who’s behind Triple Five Group and what is driving its L.A. strategy?
Triple Five was founded by the Ghermezian family, which still runs the business. In L.A. the firm sees an attractive market that can maintain its “strong pipeline” of projects, according to Reuben Benhaghnazar of Reuben Realty. He has represented Triple Five in negotiations for both the One Beverly and Aerojet Rocketdyne sites.
“They like the demographics,” he said. “It’s a high-income area, people want to move here, live here. There’s the sex appeal of Hollywood and celebrity.”
Triple Five could not be reached for comment.
Benhaghnazar said he expects to wrap up the One Beverly Hills deal by month’s end. He didn’t have an official timeline for the Aerojet Rocketdyne site, but said he hopes to complete that deal early next year. There is healthy interest from potential investors looking to join in on the One Beverly deal, he said.
“It seemed a lot of people didn’t have the courage to move forward with One Beverly Hills and now everyone wants to get involved,” he added.
Triple Five Group is an umbrella company for the Ghermezian family’s business interests. Jacob Ghermezian, who immigrated to Canada from Iran with his wife and four sons in the late 1950s, founded the company in 1972. Before Triple Five, Ghermezian was a rug merchant in Iran. He founded Triple Five’s predecessor company in the 1960s as part of an oil venture, which Triple Five is still involved with, according to the Canadian Broadcasting Corporation.
Ghermezian raised funds for his first retail development —the West Edmonton Mall — through a series of land deals. A decade later, in 1992, he opened Triple Five’s most famous retail development, the Mall of America in Bloomington, Minnesota.
Today, Jacob’s grandson Don Ghermezian, is CEO of Triple Five. His son, Nader Ghermezian, is chairman. While Triple Five has its hands in a number of businesses, including financial advisory in Canada, retail development remains its bread and butter.
Its two largest recent projects are mega-malls: the American Dream Meadowlands in New Jersey, and the American Dream Miami in Florida. Both have been hotly debated and are sprawling mixed-use entertainment complexes that will feature theme parks, indoor ski slopes and other offerings.
American Dream Meadowlands has started and stalled over the last 16 years, and when complete will cost around $5 billion, according to published reports. Triple Five secured $1.2 billion in tax-exempt bonds and a $1.6 billion private construction loan for the project last year.
It’s now scheduled to open in April, a target date that has been met with skepticism. Nearly half of the 3.2-million-square-foot development is dedicated to entertainment. It’s most notable amenity? A 16-story-tall indoor ski slope.
American Dream Miami, which Triple Five proposed in 2015, is slated to be 6.2 million square feet — making it the largest mall in the country — and cost $4 billion. The Miami-Dade County Commission gave final approval in May. The project will take up 174 acres, include 2,000 hotel rooms, another 16-story ski slope, a 20-slide waterpark, and a 14-screen 3D movie theater, among other entertainment facilities.
While Triple Five has stated it will not need public money for the Miami project, it remains unclear if the company will continue to develop it using only private funds.