HUNTINGTON BEACH, CA—GlobeSt.com has learned exclusively that construction on Pacific City, a 191,000-square-foot retail center here, has received a boost from George Smith Partners. The commercial real estate investment-banking firm has arranged $93 million in non-recourse construction financing for the project on behalf of developer DJM Capital Partners.
The financing transaction, arranged by GSP principal and managing director Steve Bram and SVP David Pascale, consisted of a $56.5-million senior loan and a $37-million mezzanine loan. Very minimal pre-leasing was required for funding of the center, which is set to open Summer 2015.
Pacific City, located along Pacific Coast Highway and also bounded by 1st St., Pacific View Ave. and Huntington St., is being hailed as a unique retail center, with architecture featuring a two-story open design that provides virtually all of the tenant spaces with ocean views. The site overlooks the Huntington Beach Pier and Pacific Ocean.
According to Bram, tenancy will include a mix of national retailers representing iconic California lifestyle brands, several well-known restaurants and an Equinox fitness center. In addition, marketplace Lot 579 will feature a mix of distinctive local and regional food artisans in a farmer’s market-style setting, similar to the Ferry Building in San Francisco or the Chelsea Market in New York City. He adds that the center will provide a “perfect showcase for retail tenants looking beyond the ‘mall mentality’.”
DJB began construction on Pacific City in late 2013 with equity after purchasing the parcel in late 2012. The loans will allow construction to continue seamlessly.
“We have worked with DJM quite extensively over the past 10 years and understand this company’s expertise in the retail market,” says Bram. “As a result, we were able to get many lenders interested in providing this non-recourse financing with minimal pre-leasing.”
Lindsay Parton, president of DJM, notes that the property’s attributes were a major factor in their decision to acquire and develop the asset. “What attracted us to this investment was the location and opportunity to create a special place that provides an experience beyond the usual shopping trip. Restaurant patrons may wander into Lot 579 and pick up food items to bring home. We are building a spectacular destination retail/restaurant complex across the street from the ocean in Huntington Beach.”
Parton adds that as a developer and owner of major retail projects in Orange County including Bella Terra Shopping Center here and Lido Marina Village in Newport Beach, “we are bullish on coastal North County.”
DJM’s CFO Eric Sahn says that GSP’s expertise was a key factor in the success of the deal. “We have been working with GSP for over a decade. The team arranged financing that fits well within our capital requirements.”