SunCal Cos. posted the winning bid of $110.2 million in May for a 2.25-acre site at the corner of Santa Monica Boulevard and Moreno Drive, where Century City meets Beverly Hills in Los Angeles. Now vacant, the parcel once held a five-story, 1970s office building that housed Jimmy's, a popular restaurant that was shuttered in 2000.
To win the property, SunCal trumped none other than “The Donald,” who dropped out of the bidding when it reached the $100 million mark. In partnership with the Related Cos. of New York, Donald Trump is said to have gone $25 million over his predetermined limit in an effort to secure the site for the Trump Tower of Los Angeles.
SunCal may not be as well known as Trump, who hosts his own reality television series and just entered the mortgage business with his son. But it isn't a piker, by any means. The Irvine, Calif.–based company is one of the largest developers of master planned communities in the West, with 120,000 lots in various stages of development. The 70-year-old, family-owned business has 11 properties under development and nearly a score in planning in California and Nevada.
“We are seeking input from the various stakeholders—the cities of Los Angeles and Beverly Hills, as well as our neighbors,” said Frank Faye, president of the company's Los Angeles/Ventura division. But company spokesman Steve Greyshock said SunCal views the project as nothing more than a vertical master planned community, as opposed to the horizontal ones the company is used to doing.
Whatever goes up, though, SunCal will build it. Although the company is most adept at turning raw ground into finished lots for sale to merchant home builders, “We are going to build this one ourselves,” said Faye. “This is truly an exceptional property with virtually unlimited potential. We're excited to begin working with the city of Los Angeles and our neighbors to create a plan that will complement the area's vibrancy and meet the strong demand for luxury high-rise living.”
It is not known whether the purchase price of nearly $49 million per acre is a record for the Los Angeles area, but Faye said it was “a fairly high price.” SunCal gets much of its financing from Lehman Brothers, the New York brokerage firm, which operates a $1.6 billion real estate fund.
And even though Trump was a loser in this instance, it's hard to feel sorry for the guy.
Since the auction, he has announced plans for a luxury hotel/condo tower as part of an $800 million Waikiki Beach redevelopment project. In the Honolulu deal, The Donald is partnering with Irongate, a Los Angeles real estate and development group, to put up a 350-foot tower with 460 rooms, retail and dining space, library, wine cellar, and fitness center. The big hitter also is developing the Palm Trump International Hotel Tower in Dubai in the United Arab Emirates.
Learn more about markets featured in this article: Los Angeles, CA.