Pacific Park is an iconic amusement park located on the world-famous Santa Monica Pier which receives four million visitors per year. The City of Santa Monica owns the pier sub-structure and has a ground lease on the amusement park space. The physical assets atop of the pier (the rides) are owned by a public REIT, which are subleased to Pacific Park. Off Road owns the right to operate the park and receives the net cash flows for the term of the leases (28 years).
Off Road Fit
The complexities presented by the legal, political and financial relationships between the various parties and leasehold interests created an unusual / complicated waterfall and capital stack. It is Off Road’s belief that the real estate lease complexity and lack of ownership of physical assets make this a non-traditional investment that others might eschew. Furthermore, such complexity may limit the number of ultimate buyers of this business and may result in Off Road owning Pacific Park for 10-plus years. Off Road is comfortable with Pacific Park’s illiquidity and believes that long-term ownership will benefit investors and local stakeholders.