Primestor Development Inc., a minority-led, community-focused development group based in Culver City, has recently switched its funding model to broaden its investor base. The company has a heavy presence in South Los Angeles and specializes in bringing retail and urban development to low-income areas that lack them.

“We’re more of a facilitator or activism organization than a developer,” said Arturo Sneider, cofounder and chief executive of Primestor. “Our main focus is identifying projects where we can have significant economic and social impact.”

Sneider grew up in Mexico City and founded the company in 1992 along with Leandro Tyberg after moving to Los Angeles and feeling frustrated by the way he saw communities of color being perceived. He wanted to revitalize those neighborhoods.

Since then, the company has grown to 54 employees and has a project pipeline worth nearly $2 billion. Its portfolio is valued at over $700 million, encompassing over 2 million square feet throughout California, Nevada, Arizona and Texas.

“We look at projects of scale. Our average project is probably going to be no less than $150 million to $200 million that serves a need on the housing side, the economic development side and creates jobs for our community,” Sneider said.

Launching the Urban Vision Fund

To raise capital previously, Primestor engaged in joint ventures with institutional investors. Last year, the company transitioned, launching “The Urban Vision Fund I,” an equity commitment project that gives Primestor more discretion and the ability to broaden its investor base.

To date, the fund has raised $150 million, thanks to companies like Sherman Oaks-based real estate investment management firm Belay Investment Group and Switzerland-based global investment firm LGT Capital Partners. 

“We’re trying to bring a large scale of capital into communities that historically don’t have access to capital,” Sneider said. “And use that capital to create, what I call, boulders in a pond, not pebbles in the ocean – projects that really bring economic vitality and vision for a neighborhood that would otherwise not happen.”

Primestor has invested more than $1 billion to date in urban, mixed-use real estate, and The Urban Vision Fund I serves as a platform for the continued expansion of its community-oriented business model centered on local economic empowerment, according to the company. 

“There’s a social reconstruction going on in the United States. The (number of) people that are very wealthy is a very small number and the (number of) people that are in the lower-income bracket is growing tremendously, and that separation is massive,” Sneider said. “No country has ever been able to show that to be a stable model long term. What keeps me awake is, ‘how do we create a better model where we can help sustain and grow the middle class so that we have a more stable social and economic dynamic in the U.S.’ And by bringing institutional awareness to our markets and showing that it can be done well and profitably and socially correctly, we’re hopefully creating a narrative that there is a way forward to do this at scale. Because I think that it is urgent.”

Bringing urban development to South Los Angeles

In looking to make an impact, the company has found itself developing primarily in South Los Angeles – an area that Sneider says is experiencing rapid population growth with not much development to keep up.

“I think it’s a very simple model of supply and demand,” Sneider said. “We have massive demand. We have very limited supply.”

Primestor identifies transit-oriented communities, in which it plans to execute local mixed-use projects to help make market-rate living attainable.

One of the company’s latest developments is Freedom Plaza, a 114,000-square-foot retail center on the Jordan Downs Redevelopment site in Watts. It was completed in spring 2020 and is nearly 100% leased, home to tenants such as Smart & Final, Ross Dress for Less, Nike and Starbucks.

Primestor is also currently developing The Walk, a dynamic mixed-use development in partnership with the city of Norwalk, as well as redeveloping Panorama Mall, bringing nearly 4.5 million square feet of new residential, hotel and other commercial uses to the heart of the San Fernando Valley.

“That has been a lifelong dream of mine,” Sneider said. “It is one of the densest Latino neighborhoods in the U.S.”

Community-driven approach

At the core of Primestor’s business model is the company’s community-driven approach. The company touts its diverse team – made up of 88% minorities and 51% women. More than 50% of its employees are local Angelenos, born and raised in the communities in which Primestor invests and manages real estate.

And beyond infrastructure improvements and local sales tax generation, Primestor is also focused on job generation. Through its local-hire strategy, the company has created more than 14,000 construction and permanent jobs that are estimated to generate $1.3 billion of annual local economic activity in historically overlooked communities, according to Primestor.

“It’s about community building its own community and creating jobs for themselves,” Sneider said.

The company was also recently recognized as an innovator in green business by the California Green Business Network for its commitment to sustainability goals as well as everyday green-business practices.

“We’ve never done a project that didn’t have environmental contamination on site, or some sort of air quality problem,” Sneider said. “We have an obligation to ensure that our projects not only are not contributing to that but are helping create a new paradigm of what’s possible.”