Neighbor News
Neil Shekhter looks to unload mega-portfolio in Santa Monica
City for sale - 23 parcels up for grabs, with 2K+ units entitled
![NMS Properties’ Neil Shekhter and renderings of 1325 6th Street, 1437 6th Street, 1430 Lincoln Blvd. and 1318 Lincoln Blvd. in Santa Monica](https://patch.com/img/cdn20/users/24171822/20201227/104026/styles/patch_image/public/1200-neil-shekhter-santa-monica-market-1155x720___27223819660.jpg)
According to an article in the Real Deal, in what looks to be the largest development portfolio offering in Santa Monica in a generation, WSC Communities will put 23 mostly entitled mixed-use sites on the market next month, The Real Deal has learned.
Marketing the land after the city of Santa Monica already greenlighted over 2,100 apartments on the sites is a stunning turn for WSC, which is controlled by the family of prominent Westside landlord Neil Shekhter. The company spent years assembling the parcels and securing entitlements, in a seaside city that even by Southern California standards is notoriously difficult to develop in.
The portfolio, according to materials seen by TRD, offers over 1 million square feet of net residential rental space, and over 150,000 square feet of commercial space. All but two of the projects are fully entitled. If a single buyer were to purchase the portfolio, the price would likely set a new record for a recent L.A. development deal. Daydream Apartments’ $405 million purchase of a 575-unit complex in DTLA was the city’s largest multifamily deal of 2019.
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Any buyer taking control over the portfolio would be in a position to become one of the Westside’s biggest landlords, but would be betting on getting the construction loans that other multifamily developers have been hard-pressed to find during the pandemic.
“There have been too many ‘ifs’ for banks to give construction financing,” said Paul Julian, a multifamily developer at Advanced Real Estate, who is selling entitled land of his own in Orange County.
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Shekhter declined to comment, but a source at WSC (formerly known as WS) confirmed challenges in landing construction financing. WSC is led by CEO Scott Walter.
A Walker & Dunlop team of Blake Rogers, Javier Rivera, Alexandra Caniglia and Hunter Combs is handling the sale. Rogers sent out a teaser Tuesday morning prompting buyers to explore “The Santa Monica Collection: A 2,113 Unit Generational Development Opportunity in Downtown Santa Monica.”
The promotion does not provide a listing price, and WSC did not disclose even a ballpark price. Rogers declined to comment.
The properties in question are the 21 Santa Monica properties marked as “Future Projects” on WSC’s website, plus two unidentified sites yet to go through the city approval process.
Most of the sites lie on the thoroughfares of downtown Santa Monica including Colorado, Wilshire, and Lincoln boulevards, a few blocks from the ocean.
Some, like 1430 Lincoln Boulevard, have been winding their way through the planning process for years. A WSC-affiliated entity purchased one of the Lincoln Boulevard parcels in 2012 for $2.5 million, according to PropertyShark (A WSC source said the overall purchase price for the site was north of $10 million). The city later approved a five-story apartment building with 100 units for the land.
Other parcels were purchased in the past year including 501 Broadway, which a WSC entity bought in September 2019 for $13.9 million, per PropertyShark. Santa Monica officials have approved an eight-story building with 94 units on the Broadway land. In March, WSC received a $157 million bridge loan for 10 of the projects.
A new owner would be able to build as per the entitlements WSC has already secured, though any major deviation from those plans would need city approval, a source familiar with Santa Monica’s planning process said.
The portfolio is set to hit the market at a time when L.A. County multifamily deals have plummeted. There have been just $6.1 billion in total L.A. metro multifamily deals in 2020, according to Savills, down from $13.2 billion last year.
Still, the existing multifamily market may bear little relation to the deal proposed by Shekhter. The entire city of Santa Monica has just under 37,000 rental units, meaning a single buyer could become a major city landlord in just one deal.
Los Angeles /
By Matthew Blake
The post City for sale: Shekhter looks to unload mega-portfolio in Santa Monica appeared first on The Real Deal Los Angeles.