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(Read more on the debt and equity markets and the multifamily market .)

LOS ANGELES-The McGregor Co. has raised joint venture equity that could total up to $28.1 million that the locally based firm will use to entitle and develop its mixed-use One Santa Fe project, according to Holliday Fenoglio Fowler. Paul Brindley, senior managing director in the L.A. office of HFF, says that the McGregor project represents a response to the demand for new rental units in Downtown Los Angeles as existing apartments are converted to condominiums.

Brindley and associate Zane Sweet of HFF arranged the joint venture equity with the Goldman Sachs Urban Investment Group, a private equity vehicle at Goldman Sachs that invests in underserved or transitioning neighborhoods in urban environments. The Urban Investment Group is part of the merchant banking division within the Goldman Sachs Group.

One Santa Fe, planned for the Arts District of Downtown Los Angeles, will feature approximately 440 apartment units and 55,000 sf of ground floor retail and live/work space. Due for completion in 2010, the project will be developed on a site across Santa Fe Avenue from the Southern California Institute of Architecture (SCI-Arc), adjacent to the Gold Metro Line and close to Union Station, Little Tokyo and the 101 Freeway.

The development will consist of four multiple-story buildings as well as parking for 800 cars in two separate on-site garages. Units will include lofts and studios as well as apartments ranging from one to four bedrooms.

Brindley notes that approximately 4,000 new residents per year are moving into Downtown Los Angeles, where the majority of new and proposed developments are condominiums. With recent conversions of rental properties into condominiums, demand for apartments has grown considerably, he says.

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