It is a familiar plot: architect meets housing developer; original developer goes belly-up in housing bust; development is half finished and gathers dust. But this Hollywood story has a happy ending.
The project is the Avenue, located at Hollywood Boulevard and La Brea Avenue, one of the most coveted corners in Hollywood’s current renaissance. The Avenue’s new owner/developer is the Resmark Companies, a Los Angeles–based full-service residential investment adviser. In 2009, Resmark acquired the construction loan from the original bank lending group at a discount, then foreclosed on the single-purpose entity that owned the 180-unit project, named Madrone.
At the time, the managing member was a John Laing Homes affiliate; today, Laing Homes, once the country’s second-largest private homebuilder, is submerged in Chapter 11 bankruptcy. The seven-story condominium development with 14,000 square feet (1,300 sq m) of ground-floor retail space was 70 percent complete when Laing halted construction. Resmark, an original investor in the project, shifted the Avenue from condominium ownership to rental, but the building will lose none of the high-end allure of its original design.
“It’s been fascinating with the new owner,” says Jonathan Watts, principal with Cuningham Group Architecture, the building’s original architect. “You’d expect [the repositioning] to lead to downgrading the materials and designing for expediency just to get the place leased up, but this owner took a remarkably different tack. Now our differentiation in the market is to create a resort-style building with condo-level specs, but as rentals.”
In addition to retaining Cuningham Group to finish the job, the developer brought in a new general contractor, Irvine, California–based Snyder Langston Residential, to complete construction, as well as interior designer Lawrence Lee and Associates, based in Los Angeles, and Mark Tessier Landscape Architecture of Santa Monica. All four members of this team generally focus on high-end condominiums rather than apartments. For his part, architect Watts adjusted the Avenue’s design away from its Hollywood Boulevard focus and toward reflecting its upscale surroundings, including the Hollywood Hills and West Hollywood. At Resmark’s request, Watts’s team redesigned the lobby, enlarging it and pushing it toward the street.
“We also simplified the colors, reworking them to white and gray to provide a more sophisticated, contemporary feel,” Watts says. “It’s now like a hotel lobby. At night the entry will glow between the two buildings flanking it. The stairs go up to a podium, slicing through the light wall. Inside are a water wall and rock garden, with dark wood on the floor and a rosewood concierge desk, similar to a hotel front desk. The entire entry sequence has become much more like a resort.”
The building is expected to be completed early this fall. When tenants begin moving in, the Avenue will take its place among several other recent residential developments that have already become Hollywood landmarks: just blocks away are the W Hotel Hollywood by Starwood Hotels and Resorts, with 143 W-branded residences, and the Sunset Vine Tower by CIM Group, with 63 for-rent residences. Like the Avenue, Sunset Vine Tower was repositioned from condominiums to luxury rentals.
Robert N. Goodman, chair and CEO of the Resmark, attributes the project’s rebirth to the team assembled to complete it. “The architect, contractor, design groups, and marketing teams on the Avenue have been instrumental in repositioning it as high-end apartments. Their individual and collective focus has been on quality, not just completion. In this case, substance is the real measure of style,” he notes.
“The attention to detail and quality of construction are above the typical apartment spec level,” Watts adds. “This extends from the finishes and appliances in the units to the amenities and common areas. Most of the other apartments in the competitive set felt like apartments—even the upscale ones. We wanted this to feel like a resort. And our market research bears this out. The business model is poised to succeed as an apartment building, with the opportunity to transition back to condos in time.”
Most of all, Watts is relieved the property was rescued after it languished half finished for two years.
“Many of the projects in this country started in 2005 to 2007 ended up as distressed properties,” he says. “But there is a new fiscal prudence these days, with much more thought put into making sure dollars are spent correctly. This year we have begun work on projects that we started five or six years ago. They are all coming back to life, with the Avenue leading the way.”