The Mira at the Warner Center was a Cityview project.

The Mira at the Warner Center was a Cityview project.

Century City-based Cityview sees increasing opportunity in opportunity zones.

The multifamily investment management and development firm recently sold one property in an opportunity zone and says it is interested in exploring the possibilities in other designated areas.

Opportunity zones are aimed at increasing development in economically distressed areas. They allow investors to defer taxes on capital gains. They were authorized by Tax Cuts and Jobs Act, which became law at the end of 2017.

Cityview recently sold Mira, a project at the Warner Center, to Virtú Investments for $70.5 million. The multifamily property is in an opportunity zone in the San Fernando Valley. The project is scheduled to have 174 units once completed.

“Mira is a project we developed in one of our fund vehicles,” Cityview Chief Executive Sean Burton said. “The plan was always to lease it up and sell it, but then we had a bunch of inbound interest because it is in an opportunity zone.”

Because the property did not yet have a certificate of occupancy, the buyer could qualify for opportunity zone benefits, Burton added.

“We were able to sell the project without taking on any of the lease-up risks,” Burton said.

Eastdil Secured’s Joseph Smolen and Mark Petersen represented Cityview in the transaction.

The project, at 21425 Vanowen St., has studio, one-bedroom and two-bedroom units. It also has a pool with a spa and cabanas, a high-end gym with a yoga studio, meditation spaces, screening rooms, coworking spaces and a virtual reality room.

Cityview acquired the site from Montage Development Inc. in 2016 for $8.2 million, records show. Cityview worked with WPIC Construction, Ken Stockton Architects Inc., Togawa Smith Martin Inc. and Nadia Geller Designs Inc. on the project.

Cityview did not receive opportunity zone tax benefits for the project since the land was purchased before the creation of opportunity zones, but the buyer will, which, according to Burton, is why they were interested in the property.

The project is expected to wrap construction by the end of 2019.

“We are excited to be able to make a low-risk, long-term investment in such a promising qualified opportunity zone,” Michael Green, Virtú Investments’ principal, said in a statement.

Cityview, Burton said, is still helping with the project as part of the sale. He said its status in an opportunity zone is why it was so enticing to investors.

“There’s definitely a premium you get for selling something in an opportunity zone,” Burton said. “That benefited the project overall.”

Burton added that Cityview is interested in developing projects in opportunity zones moving forward.

“We like the opportunity zone legislation. We think it creates opportunities for a new class of investor to come in,” Burton said.

Still, he said, the company would only be investing in areas that were already desirable.

“You first have to underwrite the real estate,” Burton said, “and the opportunity zone is an added benefit.”

Cityview is focused on areas near jobs, transit and restaurants.

Concerns of a possible recession are not hampering the company going into 2020, he said.

“The market we’re in — urban markets west of the Mississippi — those markets all tend to continue to have strong demographic and job growth. Incomes are going up; they are good jobs; and there’s still a lack of supply,” Burton said.

“Those fundamentals,” he added, “the mismatch between strong demand and weaker supply, has led to good fundamentals for development.”

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