How Magic Johnson Built A Billion-Dollar Real Estate And Business Empire While Rebuilding Los Angeles

NBA Hall-of-Famer Earvin "Magic" Johnson is one of the greatest basketball players in history. Still, arguably, he's had more success in his post-retirement career as a business owner than he did as a player. That's a bold statement, considering Johnson won five NBA championships. However, he also built a real estate and business empire worth nearly $1 billion and started it by helping rebuild his adopted hometown of Los Angeles.

If you head west on the 10 Freeway from downtown Los Angeles to the Crenshaw exit and go south, you will see a vibrant neighborhood with all the ingredients necessary for a booming real estate market. A new light rail is running and multiple mixed-use developments are under construction. A few decades ago, the landscape on Crenshaw Blvd and in South Los Angeles was unimaginably different. 

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The Los Angeles Riots of 1992 devastated large parts of south-central Los Angeles, and the area around Crenshaw Blvd was no exception. In the immediate aftermath of the riots, few big-box retailers, major grocers, or nationally recognized businesses were willing to invest in the area. That began to change when Earvin "Magic" Johnson entered the void. 

Johnson, who had retired from basketball due to his HIV diagnosis just a few years prior, was itching for a new challenge and wanted to help his community. In 1995, Johnson partnered with Sony Pictures and the Loews Theater chain to open the Magic Johnson Theaters near the Baldwin Hills Mall on Crenshaw. At the time, it was one of the only multiplex theaters in the country that served a predominantly African American community. 

Magic's theater chain opened locations in multiple U.S. cities and proved a tremendous success before it was acquired by AMC Theaters in 2006. Johnson wasn't done. He leveraged the power of his name to get a meeting with Starbucks CEO Howard Schultz. After convincing Schultz there was untapped potential in South Los Angeles and minority communities, Johnson opened over 100 locations, including one on Crenshaw Blvd.

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In 2010, Johnson returned his equity in the Starbucks locations to the corporation. Although it's unknown how much Johnson made on that deal, it's safe to assume he turned a tidy profit. Johnson started two ventures to continue making real estate investments: the Canyon-Johnson Fund and the Johnson-Yucaipa Fund. Today, Johnson has a diverse business empire that Forbes estimates is worth over $1 billion. 

That portfolio includes a stake in the Los Angeles Dodgers and the Washington Commanders of the NFL. Johnson also owns a majority stake in EquiTrust Life Insurance, which manages nearly $15 billion in assets. By any measure, Magic Johnson has become a success in the business world, and the neighborhood he originally invested in is booming. Property values and rents in the Crenshaw corridor have steadily climbed in the retail and residential sectors. 

Major investors, developers, and corporations that avoided the Crenshaw corridor like the plague in the late 1990s are suddenly tripping over themselves to get a foothold in the market. In many ways, Magic Johnson's vision, his ability to sell that vision, and his willingness to invest his capital in his community paved the way for this transformation. No wonder he's still the most popular man in Los Angeles.

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