Santa Monica Sees a Flurry of Mixed-Use Development Activity
Torrance, CA – May 23, 2012 – (RealEstateRama) — You can’t throw a stone without hitting a mixed-use development underway or in planning in Santa Monica, Calif. these days. At least eight mixed-use projects combining residential and retail are either under construction or in planning stages as Santa Monica readies for the completion of the Expo Light Rail line and works to increase the available stock of housing, according to Christine Deschaine, a principal of Lee & Associates-LA North/Ventura, Inc. who is preleasing one of the projects underway and advising on another.
The projects, which will add approximately 500 units of housing in Santa Monica, represent a combination of redevelopments and ground-up projects with a majority of the residential component consisting of rental apartments along with some condominiums. Each of the projects will contain approximately 50 to 100 units of residences.
“This is more activity than we have seen in many years in Santa Monica,” Deschaine said. “It is being fueled by several factors—high demand for apartments in the Santa Monica downtown core and the availability of financing mostly from private equity firms and construction lenders.”
Deschaine is representing SeventhandArizona LLC in the leasing of the retail portion of a mixed-use project at Arizona Avenue and 7th Street. The project, which has not yet broken ground, is slated to open in late 2013.
Deschaine has also been advising Century West Partners in Los Angeles, a joint venture formed by real estate heavyweights Steve Fifield and Michael Sorochinsky on another Santa Monica project. Fifield is the head of Fifield Cos. in Chicago and Sorochinsky is founder of locally based Cypress Equity Investments. The JV has additional projects in planning in Santa Monica.
“Santa Monica has long been an outstanding trade area for retailers because of its demographics, tourism and the critical mass of stores located there,” said Sorochinsky, whose company strategy is to acquire assets in value-add space throughout Southern California and to develop Class A multi-family and mixed use property in strong infill locations. “Now, with a renewed focus on housing, it is going to be even more attractive to retailers.”
Fifield, whose company specializes in urban infill development and acquisition of apartment and office properties, noted that demand for housing is far outstripping supply in Santa Monica.
“Five hundred units of new housing barely meet the first year’s demand for new housing,” Fifield said. “Santa Monica is highly coveted as a residential address both because of its location and character and the number of employers located there.”
That point is not lost on Santa Monica city officials. In 2010 the city adopted a Land Use and Circulation Element (LUCE) that is designed to create transit-oriented neighborhoods along the three planned Expo stations: Bergamot Station at 26th Street and Olympic Boulevard; Memorial Park at 17th Street and Colorado Avenue and Downtown Santa Monica at 4th Street and Colorado Avenue. The Expo line is due to be completed in 2015. LUCE provides a vision to replace regional office and commercial uses with local businesses located within walking distance of surrounding neighborhoods.
“We are seeing a great deal of interest from a variety of retailers who have been unable to get into the trade area until now because there just has not been a lot of retail space available,” said Deschaine. “These retail spaces are smaller than what many of the retailers we are working with typically lease, but they are willing to reduce their footprint to enter the trade area.”
Deschaine noted that she is seeing interest from grocery, drug and soft goods retailers including big box stores as well as banks and food uses.
“Despite the continuing soft retail economy elsewhere, markets like Santa Monica are seeing increases in sales and retail lease rates,” said Deschaine. “These new projects are generally leasing at a premium due to the residential component and the location, and we are not seeing very much resistance from the retail community.”
NMS Properties, Los Angeles, is redeveloping a site at Lincoln Boulevard and Colorado that currently houses a Denny’s restaurant with one- and one-half years left on its lease. NMS@Lincoln will include 97 residential units plus ground floor retail. Other developments underway include The Brand Building at 555 Santa Monica Blvd. under development by Promenade Properties.
About Lee & Associates – LA North/Ventura, Inc.
Celebrating more than 33 years of leadership in the commercial real estate industry, Lee & Associates®, is the largest broker-owned commercial real estate provider in the nation with 46 offices in California, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Michigan, Missouri, Nevada, New Jersey, New York, South Carolina, Texas and Wisconsin. Lee & Associates-LA North/Ventura, Inc., a member of the Lee & Associates group of companies, provides industrial, office, retail and multifamily/investment brokerage services across the San Fernando Valley, Conejo Valley, Antelope Valley and throughout Ventura County. Lee & Associates’ clients enjoy a comprehensive range of commercial real estate services including: sales and leasing; real estate investment consulting, property acquisition, disposition and 1031 exchange transactions; tenant representation and relocation, land assemblage, site selection, mixed-use and urban in-fill, property and portfolio evaluation and ma rket research. Founded in Sherman Oaks in 1994, Lee & Associates-LA North/Ventura now operates four California offices including Calabasas, Ventura County and Antelope Valley. For more information, contact us in the San Fernando Valley at 818.986.9800 or visit us online at www.lee-associates.com.
