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Thursday, Mar 28, 2024

NoHo Lofts to Bring East Coast Feel to Neighborhood

NoHo Lofts to Bring East Coast Feel to Neighborhood By SHELLY GARCIA Senior Reporter In recent weeks, DT Ventures finally received the change of use permit it needs to proceed with its development project. But when you are transforming a former factory into loft space, the city’s red tape is only part of the battle. Before they are done, officials at DT Ventures will not only have to change the uses permitted on the site they are redeveloping, they will also have to change the mindset of the folks who make up the target market for the project. Beginning in March, work will begin at the site of the former Adolf’s meat tenderizer factory at 5355 Cartwright Ave. in North Hollywood to transform the space into 69 loft apartments ranging in size from about 600 square feet to about 1,400 square feet. While a number of such conversions have been successfully developed in downtown Los Angeles, and these lofts are found in large numbers in New York City, Noho Lofts will be the first living and working loft space in the San Fernando Valley (although a loft component included in Noho Commons will not be far behind.) The project will also be the first conversion of an industrial site into a residential complex. Work on the redevelopment actually began even before DT Ventures closed escrow on the property last June. “There was quite a bit of risk on the table with a lot of capital at risk, so we did a lot of grass roots contact to make sure our project would get approved,” said Daniel Markel, president and CEO of DT Ventures. The group has been working for several years to garner the support of community groups and city officials and to amass a group of investors in order to proceed with the project. DT Ventures did not have the deep pockets that other large development companies have to wait it out while the project wound its way through the approval process, so the company took steps to be certain that its property would generate income even before the development is completed. Since Adolf’s moved out of the factory a number of years ago, small production companies and other businesses have been renting space in the facility and DT nurtured those tenants to make sure they stayed around. “So we’ve been cash flow positive during the holding period,” said Markel, adding that many of those tenants have also become investors in the project. The first phase of the development will include 69 units in the original factory building, which will be gutted to accommodate the lofts. They will include architectural features like exposed brick walls, stained cement floors and open ceilings. A second phase, which will be constructed on about one third of an acre of land, will follow with about 30 loft units. DT Ventures did not have much of a track record with this particular type of redevelopment, but what it does have is a history of transforming underutilized properties into cash cows. Within its portfolio are a number of apartment complexes in Studio City, Sylmar and other areas of Los Angeles that the company has purchased, renovated and sold yielding returns ranging from 60 percent to as much as 200 percent over a period that averages three to four years. But DT and its investors are putting their faith in more than just a financial track record. First they are betting on a lifestyle never before available in the Valley. They are also betting on the North Hollywood area, which they say, is ripe for a renaissance. “We’re pretty confident that this type of housing is going to be really desired in North Hollywood,” Markel said when the DT Ventures acquired the property. “It’s on the edge of an up and coming neighborhood.” Although it is too soon to tell, there is evidence that the loft concept will find more than a fair share of takers. In downtown Los Angeles, where properties have been converted into living and working lofts for a number of years now, these units, among the priciest in the city, are enjoying full occupancy. Some that have been converted to condominium units are selling briskly at prices as high as $900,000. More recently, North Hollywood, with its arts district and the availability of public transportation, has become something of a magnet for developers who see the area as an ideal neighborhood for urban professionals, and Noho Lofts will soon be joined by other residential projects targeted at an affluent market. Markel and the rest of the DT Ventures team saw the potential even before these other projects got underway. “We interviewed countless residents (of the downtown lofts) and investors in the entertainment community,” Markel said of the company’s research even before the sale closed. “I’m confident that the demand is going to be extraordinary.” Most Creative Infill Development Project: NoHo Lofts Developer: DT Ventures, North Hollywood Daniel Markel, President, CEO Dave de Csepel, CFO Tom Gallop, COO Jim Markel, EVP, Acquisitions

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