LOS ANGELES-Officials at CIM Group, the locally-based investment and development firm that earlier this month acquired a key parcel in Downtown for about $40 million, say they could begin construction of a giant mixed-use project on the site with the coming year.

The 7.2-acre property takes up the better part of three blocks bounded by Grand Avenue, Figueroa Street and 8th and 9th streets. It includes the former headquarters of Southern California Gas Co.

CIM Group co-founder Shaul Kuba says the old Gas Company complex, in the 800 block of Flower Street, will be converted into residential lofts. Though plans for the rest of the newly acquired parcel haven’t been finalized, Kuba says they will include construction of the Central Business District’s first supermarket — a business that Downtown boosters have long said is needed to make the area a true live-work, 24-hour community.

The acquisition was made by CIM through its CIM Urban Real Estate Investment Fund. The $180-million fund was established earlier this year with money from the California Public Employees’ Retirement System and the California State Teachers’ Retirement System, two of the nation’s largest pension groups.

“Our project will connect the redeveloped area around the Staples Center and Grand Hope Park to the Downtown financial core,” Kuba says. Such a project would be “an important link that is missing today,” he adds.

CIM is no stranger to ambitious urban redevelopment projects, Kuba notes. It has previously played major roles in several wildly successful street-level retail destinations, including Old Pasadena, Santa Monica’s Third Street Promenade and the Gaslamp Quarter in San Diego.

The investment and development firm’s new Downtown LA parcel was acquired from Shuwa Investments Corp. Mark Tarczynski of CB Richard Ellis represented both the buyer and seller in the transaction.

Though no one directly involved in the sale would disclose CIM’s purchase price, local brokers say Shuwa had been marketing the property for several months for about $40 million. The Tokyo-based conglomerate paid more than $75 million for the property in 1987, as the tide of Japanese investment in US real estate began to crest.

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