LOS ANGELES-China-based Greenland Group has purchased the Metropolis, one of the most high-profile development sites in Downtown L.A., from a joint venture between IDS Real Estate Group and an institutional pension fund for an undisclosed amount. The site spans an entire city block and consists of five parcels of land entitled for approximately 1.65 million square feet of multifamily, hotel, office and retail space.
The 6.33-acre site, visible from the Harbor 110 freeway, extends along Francisco St. from 8th St. to James W. Wood Blvd. and is situated between the Convention Center/L.A. Live Entertainment District and the Financial District, anchored by the new under-construction Wilshire Grand redevelopment. Metropolis lies at the heart of the proposed “Avenue of the Angels,” envisioned to be an open, pedestrian-oriented connector lined with popular cafes, restaurants and retail stores.
Groundbreaking for the project, which industry sources unrelated to the deal say will cost $1 billion, is expected to occur within the next 30 days. Tishman Construction, an AECOM company, has been selected to provide program-management and construction-management services for phase one, which will include a 19-story luxury hotel with 350 rooms and a 28-story residential tower that will house approximately 300 units. Designed by Gensler, the planned two-phase development will ultimately consist of one high-rise hotel and three residential buildings, all featuring retail on the ground floor. Completion of the hotel is anticipated for early 2016, and the first residential tower is expected to open in Summer 2016.
IDSREG’s SVPs Patrick Spillane and Rob Fuelling partner with CBRE‘s Laurie Lustig-Bower and Onno Zwaneveld to represent the seller in the land-sale transaction, along with CBRE Downtown multifamily expert Brad McCarthy, hotel experts Rod Apodaca and Bob Kaplan and CBRE debt and structured-finance professionals Andrew Behrens and Gavin Davis.
According to Lustig-Bower, the marketing platform for the Metropolis “was both domestic and international, and we received tremendous interest from all corners of the globe, including the US, Canada, Australia and Asia. This was a global effort by IDS and CBRE and one that leveraged CBRE’s geographic breadth to its full advantage. Partnering with our international offices, we were able to engage a comprehensive group of investors and developers from around the world.”
CBRE China provided investment-property consultancy services to Greenland Group relating to the purchase. The transaction represents a meaningful step for Chinese developers investing in overseas markets, according to Ivan Poon, president of CBRE China. “With the recovery of the US real estate market and a growing enthusiasm among Chinese investors to buy properties overseas, Chinese developers are increasingly moving into this sector,” says Poon.
Zwaneveld adds that the project will help meet the growing need for residential product in Downtown L.A. “Los Angeles is the largest downtown employment center in the western US, but the housing market remains grossly underserved. Downtown faces a considerable shortage. Plans for residential development at Metropolis will help meet the increasing demand, particularly among upwardly mobile professionals with disposable income and an affinity for an urban lifestyle.”