$260M M-U Runway Project Underway in L.A.’s Playa Vista
- Apr 17, 2013
Construction has gotten off the ground on Runway, the $260 million mixed-use center that will sit on the former runway of billionaire Howard Hughes’ aerospace complex in the Los Angeles community of Playa Vista. Lincoln Property Co., Phoenix Property Co. and Paragon Commercial Group are the forces behind the project, which is one segment of the 111-acre Village at Playa Vista development.
Designed by the architectural firm of Johnson Fain, the multi-faceted Runway will have no shortage of shopping options with a whopping 221,000 square feet of retail space. CBRE Group Inc., the commercial real estate services firm charged with filling up the retail square footage, has already landed a few big tenants, including Whole Foods and a Cinemark multiplex, which will occupy a respective 35,800 and 46,000 square feet. And with CVS, a national bank branch and an eatery having already claimed space, Runway’s retail segment is nearly half-full.
Additionally, a total of 420 apartment residences will be available at Runway to feed what appears to be an unfailingly strong appetite among renters in Los Angeles. Despite an influx of new product on tap for 2013, demand is expected to remain strong and allow the city to close this year with an enviable vacancy rate of approximately 3.7 percent, according to a report by Marcus & Millichap Real Estate Investment Services.
“The rebound we are seeing in the larger economy has certainly helped to drive demand for apartments on a greater scale,” Rusty Ross, a vice president with Phoenix Property, told Commercial Property Executive. “In Playa Vista, specifically, we are seeing a rapidly growing cluster of technology, Internet and entertainment companies in the area including Facebook, Google and Electronic Arts. Those firms are attracting young, entrepreneurial employees who want to live in well-designed, modern homes that are close to where they work and have direct access to stores, theaters, and restaurants. The residences in Playa Vista and at Runway fit squarely into that profile.”
And as for the work segment of the live-work-play Runway project, the development partners will provide 35,000 square feet of office space, which is also being marketed by CBRE.
It’s a carefully planned endeavor. “We want Runway to be at the forefront of everything new in the worlds of fashion, art, design and technology and to be a real center of the community where people come to shop, eat, and to just relax,” David Binswanger, Executive Vice President of Lincoln Property, said in a prepared statement.
Lenders have taken kindly to Runway. With the assistance of commercial real estate and capital markets services HFF, the developers were able to secure $150 million in construction financing from a consortium of banks led by Bank of America. In addition, Alcion Ventures came through with equity financing.
Runway is on schedule to make its debut before 2014 draws to a close.
Ultimately, the entire Village at Playa Vista will be home to 2,800 residences, including 200 senior and assisted living units; 221,000 square feet of retail offerings; 50,000 square feet of office space; and 40,000 square feet of community serving space. The destination will also encompass plenty of room for roaming, with 11.5 acres of parks and 12 acres of open space.