Holliday Fenoglio Places $168M in Financing for USC Student Housing Project

Plans for the development of University Gateway (pictured), an upscale mixed-use student housing development across from the University of Southern California in Los Angeles, move forward with the closing of financing for the 421-unit project. With the assistance of commercial real estate capital intermediary Holliday Fenoglio Fowler L.P., developers Urban Partner L.L.C., Real Estate Capital Partners and Blackstone Real Estate Advisors attained funding totaling $167.5 million in the form of a construction loan and joint venture equity. Wells Fargo’s Merchant Banking Group provided the fully underwritten construction loan, while RCG Longview Equity Fund L.P. supplied the equity for what will be an eight-story building on the corner of Figueroa and Jefferson Blvd., not far from the heart of downtown Los Angeles. In addition to the student residences, the property, designed by Togawa Smith Martin Residential, will feature 78,000 square feet of ground-level retail space and a nine-level parking facility for the accommodation of 770 vehicles. Plans for University Gateway have been in the works for some time. Urban Partners joined forces with Blackstone Real Estate Advisors on the project three years ago, at which time a ground lease was wrapped up with USC and the Shammus Group. But the development team encountered an obstacle in the form of competitor industry Conquest Student Housing. Conquest, according to Urban Partners, began a campaign of intimidation in an effort to monopolize the USC-area student housing market. In response to Conquest’s attempt to force Urban Partners and its new project out, Urban Partners filed a lawsuit against the company in 2007. It alleged that Conquest had engaged in racketeering, abusive litigation, fraud and extortion as a means of bullying Urban Partners. In January of this year, however, Urban Partners succeeded in its legal bid to eradicate the problem when the parties reached a settlement that involved a permanent injunction preventing Conquest from interfering with any existing or future development projects undertaken by Urban Partners, USC or any private developer within a two-mile radius of the USC campus. With legal issues in the past and Clark Design/Build of California on board the project as general contractor, University Gateway is now on schedule to debut in the summer of 2010. Headquartered in Los Angeles, Urban Partners is a real estate investment, development and management concern. The company also heads project delivery firm Keller CMS, which is providing construction management services for the University Gateway endeavor. New York City-based Blackstone Real Estate Advisors, an affiliate of the Blackstone Group L.P., has managed nine general and international real estate opportunity funds over the last 16 years, raising a total of more than $25.6 billion in capital. The company’s investments span a bevy of property types including hotel, industrial, office and residential. Also based in New York, Real Estate Capital Partners is a leading real estate investment advisor that has invested approximately $8 billion in U.S. real estate on behalf of high-net-worth individuals and European institutions.