Investment and development firm WS Communities has scored $157 million in financing for the development of 849 rental units in Santa Monica, The Real Deal has learned.
Madison Realty Capital is providing a bridge loan for the construction of 10 new apartment buildings in the housing-strapped city. The projects will have a combined 35,000 square feet of retail space.
The developments fall under a new agreement with Santa Monica to boost affordable housing. They include a 140-unit complex at 601 Colorado Avenue, which will have over 8,600 square feet of retail space; a 134-unit development at 1415 5th St., with 2,300 square feet of retail; and a 120-unit project at 1338 5th St., with over 2,700 square feet of retail.
The remaining properties are: 501 Broadway (94 units, 4,700 sf of retail), 1318 Lincoln Boulevard (43 units, 3,300 sf of retail), 1323 5th St. (52 units, 1,800 sf of retail), 1425 5th St. (92 units, 5,800 sf of retail), 1437 5th St. (63 units, 1,500 sf of retail), 1437 6th St. (52 units, 1,900 sf of retail), and 1557 7th St. (59 units, 2,200 sf of retail).
New York-based Madison Realty Capital, run by principals Josh Zegen, Brian Shatz and Adam Tantleff, is an active investor, developer and lender in New York and South Florida, and has been doing more financing deals on the West Coast over the past year, including a boutique Beverly Hills condominium project for the MarMar Group in October. The Santa Monica deal is not the firm’s first transaction with the Shekhters; in late 2019, it provided a $345 million loan for seven of the firm’s properties, including two ground-up developments.
“The collateral represents a collection of 10 highly desirable multifamily and mixed-use development sites with approvals in Santa Monica,” Zegen said in a statement, “where there is a tremendous amount of demand for quality housing and a lack of supply.”
Avison Young’s Justin Piasecki, Jay Maddox and Ethan Blum brokered the loan deal, with RST Capital Partners’ Rahim Thobani advising on the transaction. WS Communities’ CEO is Scott Walter, who was previously responsible for acquisitions and development at Neil Shekhter’s NMS Properties in Santa Monica. Neil’s sons Adam, Alan and Alex Shekhter are principals at WS.
“Madison’s team has once again delivered as promised and we look forward to expanding our relationship with them in the future,” Walter said.
The three Shekhter sons have been working alongside their developer father at NMS for a number of years. They founded WS Communities along with Walter, and the firm’s projects range from luxury and affordable residential developments to retail and office space in Los Angeles.
Neil Shekhter began building apartments on the Westside nearly 20 years ago, and has become one of Santa Monica’s largest residential developers.