Developer Legacy Partners plans to begin construction this week on a $54.5-million, 187-unit luxury apartment complex in Westwood in partnership with the AFL-CIO Building Investment Trust through the fund's trustee, Mercantile Safe Deposit & Trust Co.
The site is a vacant, 1.87-acre parcel on the north side of Wilshire Boulevard near Glendon Avenue, one of the few remaining properties available for apartment development in Westwood, said Dennis Cavallari, a senior vice president in the Irvine office of San Francisco-based Legacy.
Cavallari described the development as "ultra luxury," saying the one-, two- and three-bedroom apartments will rent for $1,800 to $4,500 per month. Cavallari said the development partnership acquired the building site from the Bing Family Trust for $15.6 million in a deal that closed last month. The project is expected to be finished early in 2000.
Financing is coming from the AFL-CIO's $750-million Building Investment Trust, according to Henry Pitts, a vice president with Mercantile Safe Deposit & Trust Co. in Baltimore. GE Capital Investment Advisors acted as investment advisor.
Pitts said the AFL-CIO fund has investments in apartments, office buildings, warehouses and other commercial properties throughout the United States, including a number of small office buildings in Southern California. Legacy and the AFL-CIO trust will remain co-owners of the apartment complex after construction is finished, said Pitts, who noted the complex will be a "100% union" project that will create 75 to 100 jobs.
According to Cavallari, Legacy sees a strong demand for luxury apartments in Westwood and other parts of the Westside because of the relative shortage of such units and the "very, very few sites on the Westside" available for new construction. He said the units will feature hardwood floors, granite counter tops, marble entry ways and master baths, valet parking, a concierge and other amenities.
Tenants will likely range from young professionals to "empty-nesters," Cavallari said, explaining that other luxury apartments on the Westside attract "a full spectrum of tenants from young professionals to seniors to single parents, because of the broad employment base and the diversity of the population."
Cavallari, Pitts and a spokesman for GE Capital Investment Advisors all said they expect the Southern California apartment market to remain strong despite a slowing of the national economy that many economists forecast for next year.
"We like the California market in general and the Westwood market specifically," Pitts said. He cited the "strong demand, limited supply and low vacancy rate [about 3%] in this specific market."
The Westwood project will be the third Westside luxury apartment development under construction by Legacy, which is building 350 units in Santa Monica and is nearing completion on 170 units in Marina del Rey. The company, which owns about 7,000 units and manages 15,000 units in Southern California, also expects to break ground within 60 days on a 125-unit luxury apartment project in Woodland Hills. Legacy and other developers say they're focusing on luxury apartments because the high costs of land and construction nearly prohibit the building of more moderately priced apartments in much of Southern California.
"It's almost impossible to build what would be considered affordable apartments," Cavallari said.