Canyon-Johnson Urban Fund Partners with New Pacific Realty to Purchase Transamerica Tower and Adjacent Property

LOS ANGELES--()--April 23, 2003--

 12-Acre Site Includes Potential LAPD Interim Headquarters in Burgeoning South Park District 

The Canyon-Johnson Urban Fund, L.P. and development partner New Pacific Realty Corporation have joined forces to acquire the Transamerica Tower and two adjacent mid-rise office buildings in the South Park area of downtown Los Angeles in an effort to revitalize the 12-acre property and transform it into a premier residential and office complex in the City's urban core.

"Investing in urban America is a winning strategy with the right team, and we've been proving that for years," said Earvin "Magic" Johnson, whose company Johnson Development Corporation is a partner in the investment fund purchasing the property. "We're investing in urban areas throughout the country, from New York to Milwaukee to Hollywood and now to South Park, because it's good business and it's great for inner city communities."

The Transamerica complex is 1.4 million square feet including the Tower and two mid-rise office buildings, one located on Hill Street, the other on Broadway Avenue.

"This investment is consistent with our approach to fund value-oriented opportunities in urban America, a largely overlooked segment of the real estate market," said Bobby Turner, Co-Managing Partner of the Fund. "The Transamerica Tower has great promise for investment return and provides great momentum to the ongoing revitalization of the South Park area of Los Angeles."

The Canyon-Johnson Fund's investment strategy is to identify, enhance and capture value through the development, redevelopment, acquisition and repositioning of urban real estate. In addition to meeting its investment objectives, the Fund provides and fosters economic opportunities for the underserved residents of the urban neighborhoods in which it invests.

"The redevelopment of the Transamerica site will meet existing and future demand for residential and office uses in South Park and will be a catalyst for continuing redevelopment of this burgeoning area of downtown," said Ken Lombard, Co-Managing Partner of the Fund. "The tower, which was once the crown jewel in the city's skyline, will be restored and renovated to become the symbol of urban renewal in this important part of the city."

"The current owner has made substantial investments to modernize these buildings to a 21st century standard," said David Margulies, CEO of New Pacific Realty Corporation. "Our goal is to breathe life into South Park's top real estate asset, and to bring a unified approach that brings the best of residential and office space to this historic part of the city."

In addition to the landmark tower, the complex includes the 270,000 square foot Hill Street building which is occupied by the State Bar of California under a long term lease and the 400,000 square foot Broadway building which is under consideration by the City of Los Angeles as the interim LAPD headquarters during construction of the new Parker Center.

The three buildings are connected via underground and above-ground walkways and share numerous amenities including a 23,000 square foot full service cafeteria, a 12,000 square foot roof top restaurant, a 500 seat state-of-the-art theater located on the lobby level of the Hill Building, a 25,000 square foot health club containing racquetball and basketball courts, and three parking structures with over 3,500 spaces.

About the Partners

The Canyon-Johnson Urban Fund is a special purpose closed-end real estate fund managed by Canyon-Johnson Realty Advisors LLC, a partnership between Canyon Capital Realty Advisors LLC and Johnson Development Corporation. The Fund is one of the nation's largest urban real estate funds with nearly $300 million of committed equity capital and is in a position to facilitate over $1 billion of development and revitalization in the major U.S. metropolitan markets. The Fund has already made a significant investment in the Los Angeles area through its partnership with Bond Capital; the partnership is investing $125 million on the corner of Sunset and Vine to develop 300 residential units on top of 100,000 square feet of community serving retail.

Canyon Capital Realty Advisors LLC and its affiliates, including Canyon Capital Advisors LLC, are money management firms and registered investment advisors headquartered in Los Angeles, California, with over $3.1 billion in assets currently under management. Canyon Capital Realty Advisors specializes in (i) providing equity capital for event-driven real estate transactions (ii) providing bridge and mezzanine mortgage capital to established real estate investors/owners/operators, and (iii) investing in real estate mortgages, mortgage related instruments, and corporate finance related real estate securities. Since 1990, the principals of Canyon have invested over $1.4 billion in transactions involving more than 160 real estate and mortgage assets. These investments encompass a diverse mix of property types including retail, entertainment, multi-family, industrial, office, hospitality, mobile home, and mixed use. Canyon's principals have deployed over $400 million in more than 50 urban real estate investments in the past ten years.

Johnson Development Corporation was founded in early 1993 by Earvin "Magic" Johnson. Through real estate investment and development, the company strives to serve as a business stimulus, foster local economic growth, actualize economic development goals and create financial empowerment in long neglected minority urban and suburban neighborhoods. Since its inception, Johnson Development Corporation has formed a series of strategic corporate relationships, including partnerships with Loews Cineplex Entertainment (Magic Johnson Theaters), Starbucks Coffee Company (Urban Coffee Opportunities) and T.G.I. Friday's (Magic Johnson Friday's) to develop commercial properties in urban markets and spur economic growth within these communities. Through these endeavors, the principals of Johnson Development Corporation have gained invaluable experience in the development and redevelopment of retail and entertainment properties in urban communities and federally-designated "enterprise zones." Johnson's businesses also include Magic Johnson Entertainment, Magic Johnson Music, Magic Johnson Productions, and The Magic Johnson Foundation, a separate non-profit organization that focuses on improving and addressing the health, educational and social needs of inner-city youth and organizations.

New Pacific Realty Corporation is a real estate investment and development company focused on value-added, opportunistic investments in a range of multiple asset classes, including office, residential, retail, industrial and hotel. Headquartered in Los Angeles, New Pacific is a fully integrated real estate firm with in-house expertise in acquisition, renovation and development, construction management, property and asset management, dispositions and financing. The Company is led by David P. Margulies, Arnold S. Rosenstein and Diana M. Laing (the "Principals"). New Pacific's Principals are experienced real estate professionals with proven track records in opportunistic investing. Collectively, the team has over 60 years of combined experience, with longstanding relationships on all levels of the real estate and investment communities in the region. Prior to the formation of New Pacific, the Principals were involved in over $3 billion in real estate transactions, including acquisitions, development, financings, workout restructurings and dispositions amounting to more than 100 separate transactions. A representative list of the transactions in which the principals were involved includes World Savings Tower, a 25-story commercial high rise in Brentwood; Maple Plaza, The Sunset Millennium, Arboretum and BridgeWorks Hilton Hotel.

An investment summary for the Canyon-Johnson Urban Fund follows.


             Investment Summary: Canyon-Johnson Urban Fund

Milwaukee, WI

    --  Midtown Center: A joint venture between the Canyon-Johnson
        Urban Fund and Boulder Venture, a Milwaukee-based developer,
        to redevelop 606,000 square feet of retail space on 56 acres.

Cleveland Heights, OH

    --  Severance Town Center: A 650,000 square foot redevelopment of
        a power retail center on 70 acres in Cleveland Heights, OH.

Hollywood, CA

    --  Sunset & Vine: A joint venture with Bond Capital, a Santa
        Monica-based developer, to develop a 625,000 square foot
        mixed-use project consisting of 300 loft-style apartments,
        87,000 square feet of retail, a parking garage and 20 unique
        signage opportunities on a 3.4 acre site.

Philadelphia, PA

    --  BroadMoore: A joint venture between the Canyon-Johnson Urban
        Fund and Kravco's Downtown Works to develop 400,000 square
        feet of new construction, including 150,000 square feet of
        retail, 80 student apartment units, and a parking garage in
        Philadelphia.

Brooklyn, NY

    --  Park Place Condominiums: A joint venture between the
        Canyon-Johnson Urban Fund and Anderson Associates, a New York
        developer, to develop a mixed-use project consisting of 47
        market-rate residential condominiums, approximately 4,500
        square feet of ground-level retail space, and a 25 stall
        underground parking structure in Brooklyn's Park Slope
        community.

Contacts

Sugerman Communications Group
Steve Sugerman, 310/689-7535

Contacts

Sugerman Communications Group
Steve Sugerman, 310/689-7535