Planned for a 5.4-acre site near South Grand Central Parkway, West Charleston Boulevard and Interstate 15, World Jewelry Center would be anchored by a 50-plus story trade tower that would house corporate jewelry and gem offices below luxury condominiums and be closed to the general public. Next to it would be a three-level, 125,000-sf public space filled with retail jewelry shops, a gem museum and a café.
The developer is Robert Zarnegin, president of Heritage-Nevada and Probity International Corp., a Beverly Hills, CA-based development firm. The 60 LOIs represent about 160,000 sf of space, or about 20% of the 800,000 sf of planned office space within the proposed tower. The current asking price is $775 per sf and the minimum purchase is 1,000 sf; the rate is expected to increase in the next 90 days.
"The word is spreading much faster than we anticipated," Boyajian says. "Our [exclusive negotiating] agreement with the city requires us to take reservations for 25% of the saleable space in the first year, which ends July 11; we're on pace to be 40% reserved by that time."
The development timeline calls for work to begin later this year; project completion is slated for mid-2010. Boyajian says the next steps are to convert the LOIs into reservations with 5% deposits later this year and to negotiate a disposition and development agreement with the city. Boyajian expects to have the reservations converted to purchase and sale agreements by mid 2008.
"The hard part is getting people in the industry who usually make commitments via verbal agreements and handshake to sign on the dotted line, even a non-binding letter of intent," Boyajian says. "The good news is that while it is harder on the front end it should result in a higher conversion rate than is normal. I'm hoping [to convert] 80% not 50%."
After announcing plans in October with 10 companies having signed on, Boyajian and his team made a series of presentations in Istanbul, New York and Hong Kong, among other places. By mid-February, 41 companies had signed up. Since that time, another 19 companies have signed LOIs. Next, Boyajian plans to have a major presence at international trade shows and other industry events both in the US and abroad.
"I can't point to one thing that's contributed to [the recent flurry of activity]," Boyajian says. "It's getting past the Christmas season, which is everything to the industry, our presentations, the direct mail campaign; all those things combined have built the momentum."
The latest firms to sign LOIs include: MJ Christensen; Betlach; Susan Eisen Fine Jewelry & Watches; RH & Co.; Silver Star Jewelry; Jewelers Mutual Insurance Co.; Exclusive Gems; Cora International LLC; Gemological Institute for Precious Stones; Caretta Inc.; Gold & Diamond Inc., Houston; Oro Diamante; Canadian Gem; Liberty I. Exchange; Mason-Kay; Steven L. Miller Professional Law Corp.; David Tishbi Handcrafted Jewelry; Global-findings.com Group Ltd; and NK Supply.
Companies that have signed LOIs for retail space within the development include Robert Wan Tahiti; Alan Friedman Designs; Chow Tai Fook Group; and Dhamani Jewels.
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