Los Angeles-based multifamily development company LaTerra Development and QuadReal Property Group, a global real estate company, have formed a joint venture to invest up to $250 million in equity to develop and operate multifamily communities in Southern California with a focus on Greater Los Angeles.
The venture has closed on two land acquisitions, the first being for the development of 573 apartment homes adjacent to a transit stop in downtown Burbank at 777 N Front Street, Burbank, CA. Burbank is home to a significant and robust employee base, driven by leading media companies such as Disney and Warner Brothers. This project will help to alleviate the city’s supply-demand imbalance – only one apartment project has been built in Burbank in over 20 years, giving Burbank the highest jobs to housing ratio of any city in California.
The second land site is for the development of 71 apartment homes in West Hollywood at 7617 Santa Monica Blvd, West Hollywood, CA. This boutique project will cater to the West Hollywood submarket, with a location that is highly central and walkable to both employment and lifestyle destinations. Prospective residents will enjoy 360 degree views of West Hollywood from the rooftop pool. The venture is expected to break ground on the site in 2020. Both projects bring affordable housing components to their respective communities – 69 homes for Burbank and 11 homes for West Hollywood.
”Los Angeles is at the center of the ‘techtainment’ boom, the intersection of technology and entertainment, but apartment supply has failed to keep pace.”
“QuadReal is a well-respected, world class organization with whom we are honored to partner for our new build to core strategy in Los Angeles, one of the best apartment markets in the country,” said Charles Tourtellotte, chief executive officer for LaTerra Development. “Los Angeles is at the center of the ‘techtainment’ boom – the intersection of technology and entertainment– but apartment supply has failed to keep pace. The Burbank and West Hollywood markets exemplify this trend, making these two projects excellent assets with which to seed the venture.”
Tim Works, Managing Director, Americas for QuadReal, added: “We are pleased to form this relationship with LaTerra, which has extensive development experience in the Los Angeles market. Los Angeles has extremely high barriers to entry, and we are excited to partner with a local operator that has significant entitlement expertise and reach into the local market. Burbank and West Hollywood are sites that LaTerra spent years entitling, allowing QuadReal to immediately gain access to two of the best submarkets in Los Angeles.”
Jonathan Dubois-Phillips, President, International for QuadReal, reinforces the company’s conviction about this strategy, with this timing: “Investing in global markets with constrained housing supply encourages our investment of time and resources, especially when demand is strong and increasing. Our convictions and commitments are long term focused. We aim to see beyond short term dislocations if not seek opportunity within them.”
Macquarie acted as exclusive financial advisor and global placement agent on behalf of LaTerra in connection with the formation of the joint venture.