David Schwartzman’s Harridge Development has scored $485 million in construction financing for Crossroads Hollywood, its $1 billion mixed-use development, The Real Deal has learned.
Madison Realty Capital provided the construction loan to Harridge to build studio space and residential units along Sunset Boulevard just east of Highland Avenue, property records show. Terms of the loan were not disclosed.
Crossroads Hollywood has been in the works since 2015, with plans to incorporate the landmarked outdoor mall called Crossroads of the World. Harridge originally planned for the project to include a 308-room hotel to go with 950 residential units and 190,000 square feet of commercial space across nine buildings.
It’s unclear where planning for the hotel element stands right now, and the production stages are a newly disclosed aspect of the project.
The construction financing was assigned to two of Harridge’s limited liability companies — with a portion going toward the development of production stages and the other for multifamily development. Harridge has not disclosed how much production space it plans to build.
Sources familiar with the transaction told TRD that investment firm Atalaya Capital and the billionaire Koch family are equity investors in the project, replacing Cerberus Capital Management as the money behind the deal.
Harridge has built a number of mixed-use and apartment complexes across Los Angeles. Most recently, it purchased the Baldwin Hills Crenshaw Plaza, with plans to spend $1 billion on redevelopment.
Atalaya Capital has also teamed up with Harridge on a separate mixed-use project in Granada Hills that is slated to include 140 units and 102 rental townhomes.
Though still a relatively new player in the California lending market, Madison has financed Harridge on a few deals, including a $91 million construction loan for the Granada Hills project and a $110 million loan for a single-family home complex in San Pedro.
Madison declined to comment on the deal. The loan looks to be its largest construction financing deal so far; in September, the firm made a $450 million construction loan to New York-based Rabsky Group for a 1,098-unit mixed-use property in Downtown Brooklyn.
The Crossroads deal also marks Harridge’s first foray into studio real estate, which has boomed during the pandemic, leading institutional investors to pump money into the asset class.