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The Real Deal Los Angeles

Steve Witkoff makes major resi play at Fred Segal
site in Santa Monica

Company in negotiations to develop rental complex: sources
By Katherine Clarke | March 22, 2017 03:36PM

Steve Witkoff, 500 Broadway and 1626 Lincoln Boulevard (Koning Eizenberg Architects)

Steven Witkoff, the New York-based developer behind the Edition Hotel in West Hollywood, is making a big rental play in Santa Monica.

His firm, Witkoff Group, is in advanced discussions to partner with an undisclosed institutional investor to develop a 249-unit rental complex at the former Fred Segal site at 500 Broadway, The Real Deal has learned.

Dune Real Estate Partners and Beverly Hills-based KRE Capital were originally slated to develop the site. While the discussions involve those partners remaining in the deal, Witkoff is poised to make a sizable investment in the project, which is pegged at a total of over $400 million, sources said.

As part of the deal, the partners would also complete the development of 64 affordable units off-site at 1626 Lincoln Boulevard, which would be owned and operated by Community Corporation of Santa Monica, an affordable housing organization.

Brett Mufson, the head of acquisitions for Witkoff, declined to comment on the deal.

The seven-story, mixed-use project, designed by Koning Eizenberg Architecture, has been in the works for several years. The Santa Monica City Council signed off on it last year.

Fred Segal vacated the building in 2014. The fashion brand’s iconic Melrose Avenue store also recently sold for $43 million to CormackHill, a Canadian retail investment firm.

The brand recently inked a deal for a 22,000-square-foot store a 8500 Sunset, CIM Group’s Sunset Strip project.

Witkoff and partner Howard Lorber recently broke ground at the West Hollywood Edition, which is slated to have 190 hotel rooms, 20 condominium units and nightlife venues. Witkoff’s myriad holdings in New York include the lower floors of the iconic Woolworth Building, as well as condo projects like 10 Madison Square West, 111 Murray Street, 150 Charles Street, 215 Chrystie Street and mixed-use project which includes an Edition hotel at 701 Seventh Avenue.