Acquisition of bank-owned L.A. site marks Mountain’s sixth joint venture in the area
LOS ANGELES – March 18, 2012 – The joint venture between Mountain Real Estate Capital (MREC) and Harridge Development has recently acquired a bank-owned residential infill site located at 5120 Melrose Avenue, situated five miles northwest of downtown Los Angeles adjacent to Paramount Studios. The partners are in the process of re-entitling the site from multifamily to single family lots which they plan to sell to homebuilders. The terms of the acquisition were not disclosed.
“The acquisition of this project on Melrose Avenue is the exact type of infill opportunity MREC and our developer partners have been seeking and closing in Southern California,” said Peter Fioretti, MREC’s chief executive officer. “Identifying such opportunities is just the first step – the more challenging part is value-add through creative land planning and product design to meet current market demands. That is why we team up with best-in-class developers and builders like Harridge on projects like this: to identify and create hidden value and assure success.”
The Melrose acquisition represents MREC’s sixth joint venture in Southern California, accounting for over 300 lots for development and house construction, with projected sales value exceeding $140 million. Since 2010, MREC has purchased assets in 10 states from 30 financial institutions and is capitalized with $1 billion to acquire distressed notes and assets. Since 2010, MREC has invested $260 million to acquire 10,000 lots/homes and 9,000 acres, with projected sales exceeding $1.2 billion.
Harridge Development was recently formed by David Schwartzman, a Los Angeles-based real estate developer. Schwartzman has more than 22 years of real estate experience beginning with his homebuilding-development career in 1990. He has completed more than 20 projects in Los Angeles and controls approximately 700 lots in Southern California. Said Schwartzman, “It was fortunate that we had recently closed our first joint venture with MREC, because this new opportunity on Melrose involved some tricky land use and development issues, and also required a quick decision. Because MREC’s principals have development experience and not merely capital providers, I was confident that we could work together to overcome these challenges in a timely fashion.”
Mountain Real Estate Capital is the equity investment arm of the Mountain Real Estate Group, founded in 1993 by its CEO, Peter Fioretti. Headquartered in Charlotte, N.C., its homebuilder joint venture and asset management groups, headed by Managing Director Joel Kaul, are based in Minneapolis, and its national origination team has additional offices in New York, Los Angeles, Richmond, Va., and Newport Beach, Calif. Lance Franklin, senior investment manager in Los Angeles, originated and managed the closing of this transaction for MREC.
“The Harridge team has demonstrated a unique ability identifying niche infill opportunities in the Los Angeles area and creating value through creative re-entitlement and site design,” said Franklin. “We believe that Harridge will continue to be a great partner in pursuing additional infill Los Angeles opportunities.”
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