A team of entertainment impresarios led by a movie producer are the likely new owners of Hollywood's iconic Dolby Theatre, and they have plans in the works to throw the property even further into the spotlight.
A LLC made up of a movie producer, a former studio head, an advertising entrepreneur, a restaurateur and a member of the United Arab Emirates royal family has paid $50 million to take over the Los Angeles venue, home to the Academy Awards, from the California Public Employees’ Retirement System. The pension fund listed the 183,000-square-foot theater for sale about a year ago.
The new owners plan to boost the volume of annual live events at the venue from 100 currently to 300, according to Christopher Bonbright, managing director and principal at Avison Young, who represented the buyer: JEBS Hollywood Entertainment Investors.
The goal is to create a year-round, world-class entertainment venue out of the 3,400-seat cinema located at 6801 Hollywood Blvd. in the Ovation Hollywood retail and entertainment center on Hollywood Boulevard. Demand for live events has risen since the onset of the COVID-19 pandemic, with the entertainment industry "recovering its balance in 2023," according to a report from PwC that predicts industry revenue to top $3.4 trillion in 2028, compared to $2.8 trillion last year.
Attendance at live music events that used ticketing service Ticketmaster jumped 20% year-over-year year to 145 million people in 2023, according to owner Live Nation. Live music ticket sales climbed 18% last year despite a 23% hike in average ticket prices, according to Pollstar.
"Live venues are becoming more of a part of performers' revenue and more people want to go to concerts and live events," Bonbright said. “Important partners are going to come in” to bring a wider range of performers and content to fully tap the potential of the theater."
Experienced owners
The owners aren't new to Los Angeles' theater scene; JEBS is led by movie producer Elie Samaha whose other commercial property holdings include the famous TCL Chinese Theatre, two historic Hollywood Boulevard movie theaters that have since become nightclubs and popular Japanese restaurant Yamashiro.
“With this deal, they’re showing a high level of confidence in Hollywood and in live entertainment,” Bonbright said.
Other members of the buying group include Sherwin Jarol, founder of SMB Equity and Bradley Associates and managing director at Quantum X; Jeff Sagansky, former Sony Pictures president; Robert Azinian, a longtime restaurant operator; and Jonah Lazowski, son of LAZ Parking CEO Alan Lazowski and founder of his own parking lot advertising firm. Sheikh Abdulla Bin Mohamed Al Qasimi, an entrepreneur and member of the United Arab Emirates’ Al Qasimi royal family, is also part of the LLC.
Samaha and the JEBS team plan to apply the strategies they say have helped transform the TCL Chinese Theatre from an underutilized venue into a world-famous attraction to the Dolby Theatre, according to Bonbright.
The theater was constructed in 2001 to house the annual Academy Awards show, more commonly known as the Oscars, and has hosted a diverse array of world-class performances and popular TV show tapings.
Dolby Theatre is located within the Ovation Hollywood retail center that's been owned by Gaw Capital and DJM Realty since 2021. In addition to the theater, the purchase includes two parking lots that sit on 1.5 acres, with one lot leased to the "Jimmy Kimmel Live!" TV show.
Inside the deal
The deal that paved the way for such lofty plans for the theater was not a straightforward one, according to the players. Key entities involved in the property include the city of Los Angeles, its Community Redevelopment Agency, and the Municipal Improvement Corp. of Los Angeles, with various subleases dating back to the late 1990s.
California Public Employees’ Retirement System, or CalPERS, sold the property for $50 million, according to people close to the deal, while the city of Los Angeles still owns the land the theater and Ovation complex sits on. JEBS entered a 99-year ground lease with the city for $1 per year.
JLL's Will Poulsen and Peter Hajimihalis represented the seller, with Carl Muhlstein from Muhlstein CRE assisting in the transaction. Poulsen noted the sale represents "an exceptional long-term investment for the buyer."
The JEBS Entertainment Group was one of several firms bidding to take over the property, brokers said, with the selling group initially picking a Texas-based buyer, before the deal "ultimately came back to us," Bonbright said.
There were financing complications, too. After JEBS' financing fell through 15 days before the scheduled closing, Slatt Capital principal Antonio Hachem and vice presidents Cornelius Baliukonis and Wendy Wang stepped in to arrange acquisition financing for the deal from Castellan Real Estate Partners.
The same Slatt Capital team also helped arrange financing on the neighboring TCL Chinese Theatre when purchased by a different investment group led by Samaha.
JEBS is actively pursuing other assets in the area, Bonbright added.
“Hollywood has had issues [in recent years] like everywhere else, but all the ingredients are there for a comeback," he said.