Zach Vella sees an opening, and he’s going for it.

The principal of New York-based Vella Group is shifting his real estate investment buying focus to the hot Los Angeles market where, he says, big New York firms now largely fear to tread.

New York’s institutional investors are so risk averse these days, according to Vella, that they’re locked in on the Big Apple just to avoid L.A.’s long approval process.

As Vella sees it, that’s driving up competition in New York and creating opportunities in L.A. for more adventurous players.

“We will aggressively keep biting in the L.A. market,” Vella said, adding that his company is focusing on the Arts District, Hollywood and Hawthorne. “We will be concentrating on converting neighborhoods. We really like building creative office.”

One of Vella’s largest projects is the Arts Matrix, formerly known as 670 Mesquit, in the Arts District. Vella’s developing the property near the L.A. River with the Gallo family, the land’s owner, and equity partner London & Regional Properties.

They’re planning more than 300 housing units, a 236-room hotel and 136,000 square feet of commercial space. The group brought in designer Bjarke Ingels, of 2 World Trade Center fame, to design the project.

“These are the kinds of projects I want to spend my time on,” Vella said. “It’s a large-scale project in an exciting, interesting area.”

Vella said the property was part of what made the company interested in an area like the Arts District.

“It felt so exciting,” he said. “I saw potential in the Arts District. We saw the ability to partner with the landowner at Mesquit. It felt like Tribeca 25 years ago.”

Vella said Hawthorne resonates with him a similar way. “It had the same feeling,” he said. “It was a neighborhood with the architecture that explodes, with old manufacturing buildings prime to convert to creative office.”

For example, he’s developing a 62,000-square-foot headquarters at 12515 Cerise Ave. for Ring, the home security company that was bought by Amazon.com Inc. for $1 billion.

The large light-manufacturing buildings in the area are attractive to tenants, Vella said.

Vella Group made news in 2019 for several deals. Last summer, the company purchased a 200,000-square-foot campus at 650 and 700 Pacific Coast Highway in El Segundo for $50.8 million.

Vella said the property, which is leased to Boeing until the end of 2020, will undergo significant changes to become a 300,000-square-foot creative office campus using additional buildings and land purchased next to the site to construct an additional building.

His partner on the project is London & Regional.

Last fall, Vella Group sold a retail portfolio at 8436-8452 Melrose Place in West Hollywood for $47.8 million to Acadia Realty Trust. The company had purchased the portfolio from JH Design Group and Prince Street Partners in 2013 for $29.5 million.

Vella Group is a minority investor in the much-anticipated Arts Club at 8920 Sunset Blvd., also in West Hollywood. The proposed nine-story project will feature creative office space, a gallery and a supper club. It is backed by Gwyneth Paltrow.

Vella said he plans to hold the properties for the long term, focusing on roughly 80% ground-up ventures and 20% adaptive reuse projects.

Vella formerly founded real estate company VE Equities with a partner.

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