Blackstone Expedites $135M University Gateway

Paul Keller, co-founder and principal of Urban Partners, says the partnership agreement with Blackstone fulfills the capital requirements necessary to obtain construction financing. Construction is scheduled to begin in the third quarter of 2006, with completion expected in the third quarter of 2008.The lease agreement with USC provides a tenant for 70,000 sf of retail space at the project. Keller notes that University Gateway is being built entirely with private money and uses no public subsidies.

The eight-story University Gateway will be home to more than 1,656 students, and will provide more than 11,000 sf of student service facilities, including computer rooms, laundry facilities, exercise rooms and other spaces. In addition, the project will feature neighborhood-oriented retail, including a bookstore and restaurant.

The University Gateway project represents "a unique investment opportunity in the privately built student housing sector," according to Frank Cohen, managing director of The Blackstone Group. Cohen sees privately built student housing as a rapidly growing area for institutional real estate capital.

University Gateway is also one of the first redevelopment efforts along Figueroa Corridor, a stretch of Figueroa connecting South Los Angeles and the university campus with downtown Los Angeles. Revitalization of the Figueroa Corridor is one of the key goals of the Los Angeles Community Redevelopment Agency.

The University Gateway development joins a number of projects currently proposed or under development along the Figueroa Corridor. Among them are the $105-million Galen Center, comprising a 10,260-seat arena and a separate Athletic Pavilion; a new Audi/Porsche/Volkswagen dealership; and the adaptive reuse of a former manufacturing building into 200,000 sf of office space.