Two of the hottest incentives for real estate developers these days are Opportunity Zones and Transit Oriented Communities.
A Hollywood parking lot that qualifies for both, and is a prime development site, just sold for $20 million.
Development firm KOAR Institutional Advisors, led by Bruce Rothman, sold the 14,300-square-foot lot to an affordable housing developer, The Real Deal has learned. The deal closed last week, Rothman confirmed.
An entity linked to Missouri-based CRA Investments — which invests in affordable housing projects across the Midwest — was the buyer. CRA did not respond to requests for comment.
Located at 1600 North Hudson Avenue, the property sits a few steps from where L.A.-based KOAR is planning its 191-room Schrader Hotel.
It’s also few blocks from the Hollywood/Highland Metro station, allowing the new developer to take advantage of L.A.’s Transit Oriented Communities program. The program lets multifamily developers who build near transportation hubs to increase the size of their projects if they set aside a portion of the units as affordable.
Zoning laws currently permit hotel, mixed-use or multifamily developments on site. Marketing materials reveal the property is leased to the parking lot operator until March 2021, with no option to renew.
Real estate investors have been launching massive Opportunity Zone funds to take advantage of the tax benefits the federal program offers. The program 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.
In Hollywood, Relevant Group has taken the lead with four projects proposed in the same Opportunity Zone. While it has already completed two of the four hotel projects it recently received approval for a third. Dubbed the Selma Wilcox, that hotel is slated to include 114 rooms.