Los Angeles-based Crimson Holdings has its work cut out in Venice.
The real estate firm is planning two separate residential developments across Venice Boulevard from each other, The Real Deal has learned.
The first one, at 12444 West Venice Boulevard, calls for a 77-unit building with 2,100 square feet of retail space, city planning documents show.
A two-story retail and commercial center is currently occupying the site, and would be demolished as part of the project. Crimson purchased the center as part of a 16,420-square-foot retail strip for $1.2 million in May, according to CoStar.
The second development, planned for 12575 West Venice Boulevard, calls for the demolition of an existing commercial building, which the firm purchased for $2.3 million in 2013. In its place a 36,472-square-foot, 52-unit multifamily residential building would rise. Five of the apartments would reserved for “very low income” households.
Crimson specializes in acquiring “multifamily assets in lower-risk markets,” its website reads, and pursues redevelopment opportunities in “geographically constrained” areas.
Venice certainly fits that bill. It is one of the most expensive L.A. markets for renters right now, with the monthly median rent of $2,950, according to a CoStar analysis. For the greater L.A. area, it’s about $1,800. In 2015 alone, Venice’s average rent grew by 9.7 percent.
The beachfront community is indeed a tight market right now, according to CoStar senior market analyst Steve Basham.
“You’ve got the whole Silicon Beach phenomenon driving the market, with the influx of all those tech companies and younger, well-paid people,” he told The Real Deal. “There’re a lot of wealthy people chasing a limited amount of units, so rents will rise.”
But several multifamily projects are currently in the pipeline, including Equity Residential’s Altitude Apartments and AMLI Residential’s AMLI MDR, which will add a collective 1,130 units to the market.
While large developers have the capacity to push these massive projects, Basham said, “it’s a lot easier for smaller-scale guys to go for conversions.”
Crimson could not be immediately reached for comment.