IRVINE, CA—A newly formed LLC comprising a subsidiary of Five Point Holdings and two other investors has secured a five-year, floating-rate, $339-million loan from Starwood Property Trust for Five Point Gateway, a four-building office/R&D campus here. FPH holds a majority of the equity interest in the development.

The borrower is acquiring the assets through a partial sale-leaseback with investment-grade tenant Broadcom Corp., the project developer after it acquired the land in order to build a corporate campus. The development, which is nearing the completion of construction, will comprise more than 1 million square feet of space.

Designed by architecture firm Gensler, the buildings are located at 15101, 15131, 15161 and 15191 Alton Pkwy. and are part of the larger 72-acre Great Park Neighborhoods master-planned community in the Irvine Spectrum Submarket. Broadcom plans to leaseback 15101 and 15191 Alton Pkwy., which total 640,944 square feet or 64% of the total portfolio, on a triple-net basis. Confirmed tenants of the other two buildings at 15131 and 15161 Alton Pkwy. will include Lennar Corp. and Five Point, with the remaining 232,223 square feet currently available for lease. The campus will feature a generous amount of open park space with landscaping, “best-in-class” new construction and extensive amenities.

The HFF team working on behalf of the borrower for the loan included senior managing director Kevin MacKenzie, director Lee Redmond and associate Peter Thompson. According to Redmond, “This transaction marks the beginning of Five Point's commercial operations in Irvine.” MacKenzie adds, “Starwood was able to differentiate themselves during the marketing process due to their ability to provide the most efficient pricing at optimal leverage with extremely flexible terms under a compressed time frame.”

GlobeSt.com was unable to reach FPH before deadline for comment on the scope of this project. However, as GlobeSt.com reported in March, Emile Haddad, chairman and CEO of FPH, spoke at the 2017 USC Gould Real Estate Law and Business Forum about demographic shifts and how these shifts are informing their community developments in California. “Millennials are going to be driving the economy going forward,” Haddad said, adding that Gen Z is the next demographic set to inform the market, with this demographic is now starting to graduate from college. “We don't even talk about Gen Z, but in 10 years, the oldest will be 32,” said Haddad, adding that both demographics want similar living environments that focus on live-work-play.

With these new demographic patterns, FPH has taken a new approach to development, which Haddad said was to “go back and scramble the egg”—in other words, mixing and crossing real estate asset classes. “We mix everything from asset class to income.” FPH, which currently has projects in San Francisco, Los Angeles and Orange County, is creating live-work-play communities with everything from housing and office spaces to retail, entertainment and hotels.

Earlier this month, the first 53-acre phase of the Orange County Great Park Sports Park opened, with a free daylong community celebration that included family games, sports activities, gourmet food trucks and a free concert by the Blues Brothers featuring Dan Aykroyd and Jim Belushi. Built on the site of the former Marine Corps Air Station El Toro, the Sports Park is ultimately planned to be nearly twice the size of Disneyland and is the result of an innovative public-private partnership between the City of Irvine and Five Point's partnership (Heritage Fields El Toro LLC). The partnership is spending approximately $250 million to improve, operate and maintain 688 acres of the Orange County Great Park and infrastructure serving the Great Park. The first phase is a world-class youth sports facility that complements the schools, economy and neighborhoods of Irvine. The Sports Park is on track to become one of the largest public multisport facilities in California and one of the largest in the United States.

Instant Insights /

Partial Sale-Leaseback Generates $339M Loan

Related Stories

Recommended For You