Starwood’s $500M Opportunity Zone fund is buying in LA

Starwood is joining Holland Partner Group on a big multifamily complex in San Pedro

TRD LOS ANGELES /
May.May 14, 2019 10:00 AM
Starwood Capital’s Barry Sternlicht, Holland Partner Group CEO Clyde Holland, and a rendering of 550 Harborfront
Starwood Capital’s Barry Sternlicht, Holland Partner Group CEO Clyde Holland, and a rendering of 550 Harborfront

Starwood Capital Group is taking its Opportunity Zone fund to San Pedro.

The Miami Beach-based firm has teamed up with Holland Partner Group on a 375-unit apartment building that Holland is developing at 550 S. Palos Verdes Street in Downtown San Pedro.

Washington-based Holland Partner had purchased the 2.5-acre development site in mid-2017 for $24.5 million. The property is expected to be completed next year. Starwood announced the joint venture on Monday.

Called 550 Harborfront, the project is seven stories with 5,000 square feet of ground-floor commercial space.

Starwood launched its $500 million Opportunity Zone fund in January, even after CEO Barry Sternlicht derided the federal tax incentive program as “political giftsmanship.”

The Opportunity Zone program launched following the passage of the federal tax overhaul in late 2017. It is designed to allow long-term investors and developers who build in low-income neighborhoods to significantly reduce or in some cases eliminate their capital gains taxes.

A number of firms have launched Opportunity Zone funds, targeting billions of dollars. Those include Silverstein Properties, CIM Group, and Anthony Scaramucci’s hedge fund, SkyBridge Capital.

For its fund, Starwood plans to focus on markets where its already active, including New York, Washington D.C., and the West Coast. Last week, the company announced it was investing in an Opportunity Zone-eligible multifamily project in New York City’s South Bronx. It has long been among the poorest areas in the country, but has seen a surge in investment in recent years.

Starwood has interest in a number of properties around L.A., but its most recent play in the area was a sale of three multifamily properties, part of a portfolio deal with Singapore’s CapitaLand.

Holland is also active in the Los Angeles area. The firm was in exclusive negotiations with the county to redevelop the San Pedro courthouse property until last spring, talks broke off. The firm completed two residential towers in Downtown L.A. last month.


Related Articles

arrow_forward_ios
From left: Nuveen CEO Vijay Advani, Graymark founder/CEO Brian Hecktman

Graymark, Nuveen pay $97M for El Segundo creative office

La Mirada industrial building

Clarion pays $77M for La Mirada industrial project

510 Park Avenue and CEO of Monster Beverage Rodney Sacks

Monster Beverage affiliate guzzles down industrial project in San Fernando

Adam O’Neill and the development site (Credit: Google Maps)

San Pedro-mania! Another mixed-use project planned for the nabe

The Spot at 2139 South Pacific Avenue and Adam O’Neill, president of Square One Homes, LLC, and Stonebridge Real Estate Group Inc. (Credit: Google Maps, iStock)

Multifamily development in San Pedro surges, thanks in part to Opportunity Zones

Starwood Capital Group CEO Barry Sternlicht and Lantana campus (Credit: Getty Images and Ehrlich Yanai Rhee Chaney Architects)

Starwood Capital set to buy part of Lantana office campus for $220M: sources

Nipsey Hussle and his property at 3420 West Slauson Avenue (Credit: Getty Images, Google Maps, Wikipedia, Pixabay)

Nipsey Hussle’s partners are raising Opportunity Zone fund, but authorities raise questions about his property

Rendering of 1400 South Flower Street (Credit: DLANC)

Shovel-ready in DTLA: Multifamily developer seeks $20M for construction site

arrow_forward_ios