HUNTINGTON BEACH, CA—Canyon Capital Realty Advisors LLC has begun funding of a $37-million mezzanine construction loan to DJM Capital Partners Inc. to complete the construction and lease-up of Pacific City, a 191,100-square-foot destination lifestyle center here. CCRA is the real estate direct-investing arm of Canyon Partners LLC.
“We are excited to work with Canyon Realty on this complex transaction,” says Eric Sahn, SVP and CFO of DJM. “We look forward to continuing our relationship in the future.”
As GlobeSt.com reported exclusively in June, construction on Pacific City received a boost from George Smith Partners when the commercial real estate investment-banking firm arranged $93 million in non-recourse construction financing for the project on behalf of DJM. 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 the $37-million mezzanine loan mentioned above. Very minimal pre-leasing was required for funding of the center, which is set to open Summer 2015.
D. John Miller, founder and CEO of DJM, tells GlobeSt.com, “We are very pleased to have worked with Canyon Capital Realty Advisors to creatively and strategically structure this mezzanine financing for our the Pacific City project. Because of our track record and the exceptional quality of this project, the debt structure we’ve designed and secured gives us the luxury of being incredibly selective in the leasing process—which is a cornerstone of our approach and the Pacific City concept, in particular.”
According to Charlie Rose, director of Canyon Realty, “We are thrilled to provide the financing for this exciting project, which will draw members of the affluent local Huntington Beach community and visitors from throughout the region to shop, dine, exercise and gather in a truly unique beachfront environment. With an adjacent boutique hotel and high-end residential development also under way, Pacific City will transform the surrounding community.”
Rose adds that Canyon is looking to establish long-term relationships with best-in-class developers such as DJM. “DJM is a premier retail owner and operator in Southern California and consistently delivers industry-leading properties.”
Construction of Pacific City began in the fourth quarter of 2013, and upon completion will include an approximately 29,000-square-foot health club, 116,000 square feet of shop space and 45,000 square feet of restaurant space, in addition to marketplace Lot 579; one pre-leased tenant there is Bear Flag Fish Co. The project is immediately adjacent to an upscale, 250-room hotel being developed by Pacific Hospitality Group and R.D. Olson Development.