After an impasse that lasted months, developer Sonny Astani has finally received approval to continue construction on the nearly completed condo tower at his Concerto development.
Work will restart Feb. 1 on the downtown L.A. project after lender Starwood Capital Group LLC on Jan. 19 approved a $12 million construction budget, the developer said.
Like other aspects of the delayed $300 million project, this stage took longer than Astani expected.
The development was slowed last year by the failure of its first construction lender, Corus Bank, which was seized by regulators. In late October, a U.S. Bankruptcy Court judge gave the project’s new lender, a partnership of Starwood and the Federal Deposit Insurance Corp., two weeks to review and approve the construction budget.
However, a Nov. 17 deadline came and went, frustrating Astani, who said he makes $1 million monthly interest payments on his $162 million construction loan.
“Something that was supposed to be two weeks turned out to be three months. It was very difficult,” said Astani, who heads Astani Enterprises Inc. of Beverly Hills and the limited liability company that is developing the downtown project.
In addition to his loan, Astani also generated $31 million for construction after selling all of the 77 units at Concerto’s six-story loft building in a one-day sale in August. However, getting those deals closed required court intervention when Corus was seized, since the bank had a lien on each unit. Astani placed his project at Figueroa and Ninth streets into Chapter 11 bankruptcy Sept. 17 and successfully petitioned a federal judge to order the FDIC to lift the liens. Astani said that 52 of the 77 sales have closed and the remaining deals will close this month.
The 271-unit tower is 95 percent complete, with remaining work focused on completing interiors, landscaping and the pool area. The should be ready for occupancy by June 30.
Starwood declined comment. The FDIC did not return calls seeking comment.
After signing two leases at its Palo Woods retail center in Harbor City, commercial real estate investor Watt Cos. of Santa Monica is starting a $14 million remodel of the property.
In the larger of two deals, L.A. Fitness signed a 15-year lease for 44,000 square feet valued at $16.2 million. In August, retailer Ross Dress for Less signed a 10-year, 29,105-square-foot lease valued at $5.7 million.
L.A. Fitness will inhabit space at the nine-acre property formerly occupied by Kmart, which vacated Palo Woods on Jan. 31. Susan Rorison, president of Watt, said the company decided to remodel the building because it would be the more “green approach” than tearing it down.
The construction, which will begin the first week of February, should be done in the fall, with L.A. Fitness opening by November. Other upgrades at the property include new signage, landscaping and lighting.
“The project is a long time coming,” said Rorison, who represented Watt in-house. ‘It’s certainly due for an uplift.”
With the two deals, the property, which Watt has owned since the 1960s, is 100 percent leased. It will remain open during construction.
Chris Wilson of Wilson Commercial Real Estate represented Watt. L.A. Fitness was represented by Realsource Partners and Pat Gilhooly of Clover Co. Gilhooly and L.A. Fitness did not return calls seeking comment.
A 100,000-square-foot warehouse in Cerritos changed hands Dec. 29 for $6.95 million.
Import-export firm United Exchange Corp. purchased the property at 17211 Valley View Ave. from Bixby Land Co., an Irvine office and industrial real estate investor.
United Exchange, which specializes in health, beauty and household products, already occupies the entire building, which it will use for distribution, said Cameron Driscoll of Voit Real Estate Services, who represented Bixby.
The sale was completed as part of 1031 tax-deferred exchange, requiring Bixby to use the proceeds to purchase another property, in this case an industrial property in San Diego County. That deal also closed Dec. 29.
The sale breaks down to a little less than $70 per square foot for the building.
Luke McDaniel of Voit also represented Bixby. The buyer was represented by Rudy Lara of Daum Commercial Real Estate Services. Lara and United Exchange did not return calls seeking comment. Bixby could not be reached for comment.
Staff reporter Daniel Miller can be reached at firstname.lastname@example.org or (323) 549-5225, ext. 263.
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