JMB Realty has scored funding to build its trophy Century City development, The Real Deal has learned.
The Chicago-based investment firm secured a $575 million construction loan for 1950 Avenue of the Stars, where it plans to build a 730,000-square-foot office tower, according to property records filed with Los Angeles County. Terms of the loan were not disclosed.
The loan values the project at a minimum of $788 per square foot — higher than many office properties that have sold on a per-square-foot basis across L.A. County in the last year.
An affiliate of Cale Street, an investment firm based in the United Kingdom, provided the financing, according to loan documents. Business records from Jersey, part of the Channel Islands off the British coast, show the affiliated entity is managed by a Cale Street fund.
Cale Street is backed by the Kuwait Investment Office and the Kuwait Investment Authority. It was founded in 2014 with an initial investment of $1.5 billion, according to a bio for its CEO, Edward Siskind.
The Cale Street entity is the lead lender on the financing package, loan documents show; the others were not named.
Sources previously told TRD that JMB had issues finding anyone to cough up a loan for the project, despite the fact that most of the building is already pre-leased to Creative Artists Agency, law firm Sidley Austin and private equity firm Clearlake Capital. The tower is set to be completed by 2026.
JMB had put out feelers for debt on the building last year, but bidding came up dry, according to two sources familiar with the matter.
For many U.S. lenders, office assets have been completely redlined, because of remote work and few tenant commitments, giving groups like sovereign wealth funds or international funds an opening.
Despite the hesitancy around the office market, Century City has stood out as a gem, commanding some of the highest asking rents across the West Coast.
“It’s the best office market in the country,” Kevin Shannon, who runs Newmark’s West Coast capital markets team, said last year. “One Vanderbilt [in New York City] may be the most expensive building in the country, but Century City is the best submarket.”