Why Developers Are High on the Valley
With all the new development and investments that are making their way to the Valley, you don't need to visit Six Flags Magic Mountain to be thrilled. That's why we're excited to host Bisnow's 3rd annual Future of the Valley, Thursday, Oct. 1, starting 7:30am.
One of our all-star panelists is Rising Realty Partners SVP Marc Gittleman (with wife Tamara in Hawaii last month), who tells us he wears a number of hats at the firm. Marc oversees property management, construction management and telecom, and through his Marc Gittleman Enterprises entity, he invests as a GP in Rising’s projects, giving him both an owner and operator perspective. Rising and Marc also own 5x5 Telecom, which is the primary fiber Internet service provider in Rising’s buildings, selling service at half the cost of other providers. When it comes to the future of the Valley, you can't take a more positive stance than Marc and the Rising team, which bought a 10-building portfolio throughout the Valley at the end of 2013. "Obviously, we felt strongly about the Valley because we bought 1.8M SF in a single, off-market transaction."
One of those buildings is 4500 Park Granada (shown in a concept rendering by NBBJ) in Calabasas. Bank of America, the current tenant, will be exiting the property at year-end, and Matt Heyn and Troy Pollett from CBRE are actively marketing the 20-acre campus. Marc says the campus is quite different from anything on the market right now—20 acres with walking/jogging paths, lush landscaping and expansive views. That said, it's been a large single-tenant property for most of its history and hasn't changed hands much, so it is an educational process familiarizing brokers with the campus. Rising is also looking to re-entitle, sell or lease another building from that portfolio purchase, 400 National Way in Simi Valley. Rising has sold most of the 10 buildings in less than two years to companies that wanted one or two of them at a time.
For properties that boast a lot of public areas or outdoor space, 5x5 Telecom makes it possible to be productive anywhere on the property. When you talk about spawning creativity and people wanting to be at the office, Marc says, "I don't think you can make a better value proposition." He says the company's tech platform allows tenants in a multi-tenant property to have WiFi throughout the property at the same speed they get in their office, on their own secure network, which the tenant controls. (Important because that Oscar-winning special effects company may not want to share its secrets with its neighbors.)
For Marc (with Tamara and son Preston), who grew up in Minnesota with its abundant trees, streams and parks, another reason to love the Valley is that it allows quick access to those topographies. (If all your knowledge about Minneapolis comes from seeing Fargo, you may be surprised to learn it has more public green space than any city in the country.) About a year ago, they moved from West Hollywood to Angeles Crest Forest so Marc could hike in the mountains with his son and Bennett, his Rhodesian Ridgeback. Outside of work, Marc previously taught Krav Maga at women's shelters, volunteered at the SPCA, and recently joined the board of PACER's National Bullying Prevention Center, which opens in LA later this year.
Another panelist will be Related Group SVP Michael Fleischer (with sons Harrison, 7, and Benson, 11),who works in the real estate credit strategies group within Related Fund Management. A lawyer, he's a senior deal guy and internal transaction counsel for the group, which originates and invests in real estate-secured mortgage loans and mezz financing, including construction loans. Michael's been with Related since the debt group was founded about two years ago. These days, he's focused on multifamily, mixed-use and hotel development projects in the Western US, including hot spots such as Seattle and San Francisco. The firm is very active providing mezz loans for construction financing throughout the country, and being affiliated with a major development company helps them evaluate good deals from a development context.
The hot spots also include the entire LA region, where Related is financing the ground-up development of a 400-unit multifamily project in Koreatown and a re-entitlement play in Santa Ana (from industrial to multifamily), and Michael also is looking at a number of multifamily developments in Glendale. Reflecting the diversity of its current portfolio, the firm also is financing a four-building condo conversion in NYC comprising more than 1,000 units, and the ground-up development of several hotels on the East Coast. When he's not at work, Michael takes his kids boogie boarding or whitewater rafting. To hear more from Michael and the rest of our all-star panelists, join us Thursday, Oct. 1, for Bisnow's 3rd annual Future of the Valley, starting at 7:30am at a venue TBD. Sign up here!