MARINA DEL REY-Developer Jerry Epstein has slated a groundbreaking later this month for a new 544-unit apartment complex here called Shores that will replace a 202-unit complex that Epstein built in the 1960s as one of the first developers in Marina del Rey. Financing for the project financing closed in early March, and Epstein's staff has been working on site preparation, demolition and grading since.
Construction of Shores is expected to create 950 construction jobs and generate $170 million of economic activity in Los Angeles County, according to an announcement by Red Mortgage Capital LLC, the mortgage banking arm of Red Capital Group, which is providing $125 million of non-recourse construction and permanent financing with a 42-year term to Shores. The loan represents the largest FHA Section 221(d)(4) unsubsidized loan ever insured by HUD, Red Mortgage notes in the announcement.
The Shores apartment development will comprise 12 buildings of four and five stories over a two-level concrete podium parking structure. Many units will have views of the Pacific Ocean to the west or of the main channel of Marina del Rey to the east. Amenities will include a landscaped two-acre central courtyard featuring pool and spa areas as well as several sundecks, outdoor fire pits, barbeque facilities and seating areas. Other project amenities include a business center, clubhouse with communal kitchen, and second-floor fitness center overlooking the courtyard. Fifty-four apartments will be offered as affordable housing to income-eligible households.
Like all facilities within Marina del Rey, the Shores will be on land owned by the County of Los Angeles, which leases it to developers in public/private partnerships. Shores is one of the key elements in the second generation redevelopment of Marina del Rey, which constitutes the largest single income-producing asset owned by the County of Los Angeles. Shores will pay ground rent and property taxes under the terms of a lease that extends to 2063.
Shores is a joint venture between Del Rey Shores LLC, which is composed of Jerry B. Epstein and a Kirk Douglas family investment entity, and Guardian Life Insurance Co. of America; the Jerry B. Epstein Management Co. will manage the project.
In addition to the construction and permanent financing provided by Red Mortgage Capital, financing for the project includes over $30 million of equity from Guardian and the other equity partners. Kevin Mulvaney of Q10/Dwyer-Curlett, a member of Q10 Capital, placed equity for the project with Guardian. A Q10/Dwyler Curlett announcement regarding the equity placement noted, "The Guardian’s favorable terms and long-term perspective appealed to the developer, who had many other parties interested in providing equity for the project."
In the Red Mortgage Capital announcement, company chairman David Goodman noted, “I have called on the owner personally since the mid-1970s, first for an opportunity to refinance the existing units he owned and then to finance the construction of the new, improved replacement units." He added, "There cannot be a better location in the country for an apartment community than this one. It's the kind of neighborhood, climate and lifestyle that draws people from all over the country to the Southern California oceanfront."
Edward H.R. Tellings, senior managing director and FHA chief underwriter for Red Mortgage Capital, commented: “In facilitating the financing of this redevelopment effort, the mission of FHA and its mortgage insurance programs has truly been served. New housing that better meets the needs of the community will be developed within a model that also offers affordable housing and a significant economic benefit to the overall area."
Nadel Residential Architects is the architectural firm for the project; the general contractor is a joint venture of Southern California-based American Multifamily Inc. and BCEGZ-USA Inc.
During the 10-year entitlement and financing process, the firms of Cox Castle & Nicholson; Armbruster Goldsmith & Delvac; Munger Tolles & Olson; and Levy, Levy, and Levy provided legal and consulting services; Pat Flynn of the Maxima Group provided economic consulting services. Krooth & Altman represented Red Mortgage Capital LLC.
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