City Market of Los Angeles is on the hunt for a joint partner for its $1 billion redevelopment project, which was recently entitled for 1.7 million square feet, The Real Deal has learned.
Sources say the developer has tapped Laurie Lustig-Bower, an executive vice president at CBRE, to take on the role. Teams from Eastdil Secured and JLL were also in the running, a source added.
But Mark Levy, City Market’s president, said the firm is still considering other potential brokers. He added that the company is in the process of evaluating the best way to bring a partner on board.
Lustig-Bower and CBRE did not respond to requests for comment.
The project, dubbed City Market, is slated to bring 948 residential units, a 210-key hotel, school, movie theater, and 225,000 square feet of commercial space to the Fashion District. It would cover three city blocks, with the tallest building reaching 38 stories.
“We always knew we would be needing a development partner for a project of this scale, certainly from a financial standpoint,” Levy said.
The firm is also eyeing a potential ground-lease structure, in which the land and the property are owned by different entities but bound by a long-term agreement. Splits for a more traditional joint venture would still need to be determined, Levy said.
Having recently secured entitlements, the search for a financial partner might be easier than it would have been before August, when the City Council had yet to approve the sprawling project. A TRD analysis from September revealed that a strong market for entitled properties has grown in recent years, as developers increasingly choose to avoid the arduous process.
Still, finding the deep amount of capital needed for a project of this magnitude is no simple task. A source familiar with the project said funding for the project could be even further challenged by recent limits to Chinese overseas spending, once a wealth of investment for a multitude of projects in L.A.