LA-based multifamily developer Topanga Partners in partnership with real estate debt and equity investment fund manager Arixa Capital recently broke ground on a 31-unit apartment project in Van Nuys, at 14541 Gilmore Avenue. The project, aptly named 14541 Gilmore, is located in an Opportunity Zone in Los Angeles, and was funded utilizing Arixa Capital’s “Qualified Opportunity Fund.” The construction loan for this project was provided by the Bank of the Sierra and includes a permanent loan conversion feature upon completion and stabilization.
The Gilmore project will feature “smart technology, wireless interface, green sustainable LEED-accredited landscaping,” and two-bedroom/two-bathroom units, according to a press release Monday. This is Topanga’s seventh multifamily ground-up project in the Van Nuys and Lake Balboa area in the San Fernando Valley. Topanga also has a 48-unit project in pre-construction in an Opportunity Zone in the Downtown Long Beach Business District.
The ground-up development represents one of the first Opportunity Zone projects in the San Fernando Valley to be funded through the 2017 Opportunity Zone Program. As part of the Tax Cuts and Jobs Act of 2017, the Opportunity Zone Program helps drive capital to designated communities across the nation by offering substantial capital-gains tax breaks for investors who invest in any of the 8,000+ designated lower-income census tracts. Investors can defer paying capital gains taxes on the money they invest in an Opportunity Zone project, and should they keep their money invested long enough, they eliminate taxation on profits from the project itself.
“We believe our Gilmore building exemplifies the future of Opportunity Zone projects where investors can channel their capital gains into Opportunity Zone buildings for attractive returns,” Steve Friedmann, a partner at Topanga, said in the release. “This project provides a positive community impact where job creation and modern housing meets affordable rents for our tenants. We will continue to source these projects in Southern California, and partner with fund managers like Arixa who share our goals and values.”
