Related Breaks Ground on $350M Santa Monica Mixed-Use Development
- Feb 17, 2012
February 17, 2012
By Nicholas Ziegler, News Editor
Related California has begun construction on The Village at Santa Monica, a $350 million mixed-use community in the city’s Downtown area. “Our intent was to create the ultimate Santa Monica village,” Bill Witte, president & CEO of Related, said. The development will contain 318 luxury condo units as well as affordable rental housing amid 20,000 square feet of retail.
The mayor of Santa Monica also reiterated the city’s backing of the project, stating that “the city’s commitment to affordable housing is an integral part of this development.” The Village will also have access to the Expo Line train system opens in 2015, connecting Santa Monica to nearby Los Angeles.
The pipeline for multi-family development is opening, according to a survey of more than 150 industry professionals by services firm Jones Lang LaSalle Inc. A full 55 percent of respondents said that construction has begun due to an increase in NOI, while 49 percent claim it’s due to the availability of financing. “I think it’s clear that with homeownership coming down, the rental space is probably the single strongest asset class in the United States right now,” Michael Berman, CEO of CW Capital, said. “We’re not seeing the high leverage we did in the past few years, so I think that will moderate what might otherwise look like a bubble.”
In the third quarter of 2011, multi-family properties in the Santa Monica submarket had just a 3.1 percent vacancy rate, a drop of 70 basis points from the year prior, according to Marcus & Millichap Real Estate Investment Services Inc. Average rents were $2,162, the highest in the Los Angeles area.
The development will be located near the city’s amenities, including the Santa Monica Civic Center Auditorium, which is slated to undergo a “substantial” renovation, as well as the Santa Monica City Hall – which is also set to undergo a $50 million renovation.
Related’s designers for the project, Moore Ruble Yudell, led the master-plan development that included a central walking street along the development’s core. Construction financing is provided by Wells Fargo and HSBC. The project’s backers claim that the Village will generate 1,500 construction jobs during the 24-month building cycle. Completion is slated for January 2014.