LaTerra Secures $49 Million Bridge Loan for Big Burbank Redevelopment
LaTerra Development secured $48.5 million in bridge financing for one of two major redevelopment projects it has planned for Burbank, Calif., Commercial Observer has learned.
Hankey Capital provided the non-recourse loan for the fully permitted mixed-use development that will replace the former Fry’s electronics big-box store, opposite the Hollywood-Burbank Airport. The new 10-acre project, named Burbank Flyover, calls for a whopping 862 new apartments – 80 of which will be reserved for very low-income households – as well as 150,000 square feet of office space. It is located at 2311 North Hollywood Roadbeside the Metrolink station.
The loan from Hankey Capital will cover all overhead costs over the next 12-18 months as LaTerra obtains permits to become ready to start and lock in a financial partner. LaTerra Chris Tourtellotte told CO that the company intends to break ground by the end of the year and hopes to snag another media company to lease the office.
Burbank’s status as the media capital of the world continues to expand thanks to the rapid growth of streaming platforms. For example, the Fry’s location is approximately one mile from the 171,000 square foot netflix office buildingand the Warner Bros.‘ Ranch Studio in Burbank is planned for a $500 million makeover.
“Burbank has obvious supply and demand metrics that are very attractive from a housing development perspective,” Hankey said. Priyesh Bhakta noted. “This site, coupled with the experience of LaTerra which resulted in another great project in Burbank, reassured us that we were lending to a top notch sponsor. Their realization of rights in the midst of a pandemic in less than 18 months speaks to that very sentiment.
Hankey Capital originally started with a $28.5 million land loan in May 2020 during one of the most uncertain times at the start of the global economic shutdown. At the time, LaTerra planned to avoid including office space because the outlook was so low at the time due to the pandemic. But since then, LaTerra has realized that with office development from the ground up, they can build space for the post-COVID-19 world.
LaTerra is clearly bullish on Burbank. At the end of last year, the company and partner of Century City QuadReal real estate group secured $198.5 million in construction financing to build a 575-unit apartment complex about 2.5 miles east in the same submarket.
Gregory Cornfield can be reached at [email protected].