Marina del Rey’s Esprit lease transfer approved
June 18, 2020
Esprit, which is located at the end of Marquesas Way, includes 437 upscale residential apartment units, 227 marina slips and 2,000 square feet of visitor-serving commercial.
MARINA DEL REY—The Los Angeles County Board of Supervisors approved a lease transfer for Esprit Marina Del Rey for a price tag of $273.5 million.
Supervisors approved the lease transfer for Parcel 12R from the current lessee Gateway KW-Esprit I Owner, LLC, to Esprit MDR Owner, LLC, at their May 12 meeting. The existing lease for Esprit, a luxury apartment building with 227 marina slips at 13900 Marquesas Way, is good through 2061.
The agreement also authorized the Director of Los Angeles County Department of Beaches and Harbors to execute any consents, estoppels or other related documentation necessary to effectuate the assignment of the Parcel 12R Lease, if consummated; and, authorize the director to execute an amendment to the lease pertaining to additional excluded transfers required by the proposed assignee of the lease, upon consummation of the transfer.
Gateway KW-Esprit I Owner requested the county’s consent to assign its leasehold interest in Parcel 12R to Esprit MDR Owner, LLC, for a fixed price of $273.5 million. Esprit MDR Owner assignee requested certain additional excluded transfers be included in the lease by way of amendment due to assignee’s affiliation with a real estate investment trust that may require reorganization or restructuring of a fund from time to time.
The terms of the proposed assignment were negotiated by the current lessee and the assignee without any involvement by the Department of Beaches and Harbors.
Per the terms of the lease, the lessee must obtain the county’s consent to the proposed assignment of the lease. According to a board letter, department staff reviewed the proposed assignment and concluded the proposed assignee’s financial condition is sufficient; the proposed combined sales price of $273.5 million for lessee’s interest in the lease appears to be justified based on the present income generated by the current uses on the parcel; and the proposed assignee’s property management company, Westhome Property Management LLC, has the requisite experience as it is an affiliate of CityView, an investment management firm with a portfolio of over $2.3 billion in multifamily and mixed use assets under management.
If the leasehold is transferred, the Department of Beaches and Harbors will receive $13.675 million as the county’s share of the proceeds from the assignment. Approximately $4.6 million of the funds will be directed to the Marina ACO Fund to continue to maintain and improve the public areas of the Marina and its infrastructure. The remaining amount of approximately $9 million will be retained by and allocated to the operating budget for the Department of Beaches and Harbors and will be accounted for as over-realized revenue in FY 2019-20.
