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8/08/18
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Dutch institutional investor Bouwinvest Real Estate Investors and MacFarlane Partners have formed a joint venture to own and operate newly built residential high-rises in New York and Los Angeles with a combined total value of $750 mil.
One of the joint venture’s two investments is full ownership of the 24-story Park Fifth high-rise rental apartment project that is currently under construction in downtown Los Angeles. The Park Fifth high-rise will consist of 347 apartment units and 5.3k sf of retail space.
Park Fifth is located across from Pershing Square, one of the largest public spaces in downtown Los Angeles; the historic Millennium Biltmore Hotel; and a subway portal to the Pershing Square Metro Station. It is being developed directly by MacFarlane adjacent to a seven-story rental-apartment mid-rise that the firm is also building. Both properties are expected to be completed during the first half of 2019.
The venture’s other investment is a partial equity interest in Level BK, a 40-story rental apartment tower along Brooklyn’s Williamsburg waterfront in New York that was completed earlier this year. Level BK consists of 554 apartment units, many of which feature unobstructed views of the Manhattan skyline. The property is adjacent to an East River Ferry terminal and East River State Park, which hosts Smorgasburg, a weekly foodie market that is one of Brooklyn’s most popular destinations. The property was developed by Douglaston Development in partnership with MacFarlane and AIG Global Real Estate.
The two properties have been developed as assets of MacFarlane’s Urban Real Estate Fund III, a privately offered commingled fund that has invested in real estate development projects nationwide and in which Bouwinvest is a partner. The formation of the new venture with Bouwinvest is part of MacFarlane’s strategy to keep some of the irreplaceable assets that it has created, enabling the firm and its capital partners to retain—and increase—their equity ownership interests in selected development projects after those projects have been completed. Under the new venture, both Bouwinvest and MacFarlane significantly increased their equity investments in each property.
Through its urban real estate program, which was launched in 1996, MacFarlane typically has sold its and its partners’ stakes in the properties it has developed, renovated or repositioned shortly after each project was completed. Over the past 22 years, the firm has invested in $13 bil in properties located in urban and high-density suburban neighborhoods of major metropolitan areas nationwide.
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