How Developers Feel About Building in Los Angeles

How Developers Feel About Building in Los Angeles

But Fed’s rate cuts provide glimmer of hope

By Daria Solovieva

JAN 23, 2024

LaTerra Development has been building, selling and buying apartment complexes in the city of Los Angeles for the past 15 years. But last year, the firm decided it was not planning to sell any assets in the city and was slowing down development, according to Chris Tourtellotte, who heads the effort at LaTerra.

LaTerra is not alone.

Since Covid, real estate players in California have had their fair share of obstacles. At minimum — the fastest rate of interest rate increases since the 1980s, homelessness in L.A. and San Francisco, companies shrinking their footprints in light of layoffs and remote work.

But when it comes to L.A. specifically, multifamily developers are having to jump through new legislative hoops. Measure ULA, the city’s new transfer taxes that came into effect last April, has become so reviled by the industry it even became a villain on a reality TV show.

“It’s causing us to look outside the city of LA for development projects,” Tourtellotte said of Measure ULA. Selling, he said, would trigger hefty taxes — 4 percent on all residential and commercial sales over $5 million and a 5.5 percent tax on sales over $10 million.

These headwinds have led to an overall low volume of  transactions and have added to developers’ apprehensiveness and ‘wait and see’ approach when it comes to investing in L.A. 

“We are seeing our way through a period of volatility that was really hard for our industry to transact in,” said Damian Gancman, the chief operating officer at multifamily developer Cityview, adding that little activity happened in 2020, late 2022 and last year. 

But, with the Federal Reserve expecting to cut rates this year, real estate financiers and developers who spoke with The Real Deal remain optimistic about the market’s long-term prospects and are seeking out pockets of immediate opportunities outside of L.A.

“Now we are seeing a clear path forward: It’ll be better in ‘24, than in ‘23,” Gancman said. 

Getting creative

Only a handful of new financing deals for multifamily projects have closed since the start of the year. Compare that to the regulation-light Miami, where more than $1.2 billion in construction loans have closed over the last couple of months and another $1 billion is expected to close early this year.

Deals that are closing are often rescue deals — cash that helps builders get through the finish line on a project, according to Shlomi Ronen, founder of L.A.-based lender Dekel Capital. He projected that we’ll see more demand for subordinate capital, as loans have become pricier.

Earlier this month, for example, Calmwater Capital provided a $32.3 million loan to GE Property Development to finish construction on a 81-unit project in San Gabriel. Subordinate lender BH Properties tacked on a $3.75 mezzanine loan, too.

Generally across Southern California, with many lenders on the sidelines, developers are using any financing tools possible to get a project finished. 

In nearby Orange County, to supplement a $17 million senior loan from Builders Capital, Nuveen gave a $9.8 million Commercial Property Assessed Clean Energy (C-PACE loan) to Newport Beach-based Westerre to finance an apartment project in Dana Point.

A C-PACE loan gave the borrower the “lowest possible cost of capital,” cheaper than a traditional construction loan, Tyler Beauregard at Concord Summit Capital, who arranged the deal’s financing, said in a statement. 

These two deals are indicative of the type of transactions we may see more of this year both in L.A. and other markets, according to industry insiders.

“Near-term acquisitions will likely be in existing assets as opposed to development assets, because you’re buying 30 percent below the replacement costs,” Gancman said, noting overall costs haven’t come down yet.

The Fed indicated in late 2023 that multiple interest rate cuts are likely this year, which has given a boost of optimism for developers — even if its effects lag into the second half of this year or next. Some are also hopeful that Measure ULA will be shot down by voters in November 2024.

Until then, Measure ULA is still impacting developers’ thinking and planning.

“This tax is making it very difficult to make deals in Los Angeles, and it’s causing the perception of increased risk,” Tourtellotte noted. “Investors, they’re looking at the City of L.A. and they’re saying, ‘Well, why don’t we just build in other cities?’” 

Waiting game

Nobody is under the impression that the challenges Los Angeles and, more broadly California, will be solved overnight. The high costs of construction are likely to continue and securing financing on favorable terms may take a while.

“We continue to see people and companies moving out of state, that’s a challenge, and it’s going to remain to be a challenge in terms of continuing to create demand for the product that we’re building,” Dekel Capital’s Ronen said. 

The size of the loan and the terms also matter, given the type of lenders that are active in the market right now: Debt funds or lenders that are not as regulated.

“The lenders that are active in the market today are higher-cost, more structured lenders, so it’s not the lender you would choose first,” Gancman said. “You have to seriously sit and question whether you move forward with that project.”

Gancman said he was speaking with a lender recently that is capping loans at 45 percent leverage, where previously loans were made up to 80 percent of what it cost to build. This means developers have to find more equity — whether it’s investor cash or more expensive financing, like a mezzanine loan or preferred equity.

But using 55 percent equity in deals is “not the most efficient way,” Gancman said, “And not the way we underwrite things, but that’s the way deals are moving forward today.”

Tourtellotte said other areas around the city of L.A.’s border were “appealing,” given the transfer tax doesn’t apply. Take Burbank in the San Fernando Valley, he said, which has the highest jobs to housing ratio in the country.

Even if their game plan for 2024 is staying on the sidelines, many remain optimistic and understand deals don’t look like what they did in the past. 

“I’m not looking at the traditional market-rate deals right now, they just do not make sense, the construction costs are just too damn high,” said Paul Schon, who runs development firm Schon Tepler Partners.

“But ED 1 with all the subsidies does make sense, so I think some of those will get financed,” Schon said, referring to L.A. Mayor Karen Bass’ executive order known as Executive Directive 1. The directive aims to streamline the approval process for affordable housing by allowing projects to skirt lengthy environmental reviews.

The measure, however, has not yet shown it can do what was intended, as some developers are still facing roadblocks, according to reports.

For now, a lack of housing inventory, prohibitive policies and an uncertain economic environment have stymied development. 

“I’m still a believer in cities as the engines of the economy and cities as drivers,” Gancman said. “But I do think it’s going to be different than it was the last 15 years.”

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Sarah Hunt

Senior Associate, Business Development & Capital Relations

Ms. Hunt joined Cityview in 2021 and is a Senior Associate on the Business Development & Capital Relations team.  She is primarily responsible for relationship management, investor communications, and marketing collateral.  Additionally, she works closely with internal functional teams on due diligence efforts and supports investor reporting and special projects.  She is also a member of Cityview’s Sustainability Committee focused on communication of ESG initiatives to investors.

Ms. Hunt has over six years of real estate investment, capital formation, and investor relations experience.  Prior to joining Cityview, she was an Associate with Chicago-based Magnolia Capital.  During her tenure, she worked on equity capital raises for numerous real estate investment vehicles.  Prior to Magnolia, Ms. Hunt was a Financial Analyst with LaSalle Investment Management where she oversaw the financial performance of assets with over $1 billion in value.

Ms. Hunt received her Bachelor of Business Administration degree in Finance, Investment, and Banking from the University of Wisconsin-Madison.

Ramtin Esfandiari

Director, Acquisitions

Ramtin Esfandiari joined Cityview in 2018 and is responsible for managing acquisitions, including sourcing, underwriting and closing multifamily development deals. Prior to joining Cityview, Ramtin was on the Acquisitions team at The Bascom Group where he underwrote over $9 billion in multifamily acquisitions across the U.S. and supported all aspects of the acquisition process. Ramtin holds a Bachelor’s Degree in Business Economics from the University of California, Irvine, and is an active member of Urban Land Institute.

Jonathan Anderson


Jonathan Anderson is the Controller of Cityview and provides leadership and oversight over the finance, accounting, and shared services departments.  Prior to joining the Cityview team, Jonathan worked at CIM Group where he held several finance and accounting roles during his tenure, most recently as head of private fund reporting and prior to that as director of SEC reporting for one of CIM Group’s publicly traded REITs.  Jonathan began his career in Ernst & Young’s assurance practice where he served both public and private clients in the real estate and asset management industries.  Jonathan graduated from the University of Southern California with both a bachelor’s degree in accounting and a bachelor’s degree in business administration with an emphasis in real estate finance.

Tina O’ Brien

HR Director

Tina O’Brien, HR Director, is a senior national and state-certified HR Professional (SPHR, SHRM-SCP, PHRca), managing the HR team overseeing all aspects of Human Resources for both Cityview and its affiliate, Westhome. Her experience spans the spectrum of the HR field, including recruitment, employee relations, performance management, benefits, compliance and employee development. She joined Cityview in summer 2021 from a telecom technology firm in Van Nuys, and previously worked for a private real estate investment and property management company in Beverly Hills. Tina is an LA native and she’s committed to helping grow our vibrant, healthy corporate culture here at Cityview.

Noah Watts-Russell

Director Asset Management
Noah Watts-Russell is Director, Asset Management of Cityview. As Director of Asset Management, he oversees Cityview’s value-add portfolio and is responsible for establishing and driving the portfolio business plans to maximize performance and value. Prior to joining Cityview, Noah was an Associate in the Real Estate division at The Blackstone Group where he oversaw over $15bn in multifamily real estate (>70,000 units, covering market rate, affordable and rent-controlled) and worked on over $2bn in total sales and $1bn in refinancing. Prior to Blackstone, Noah managed the FP&A team at LivCor, Blackstone’s multifamily asset management company. Noah holds a Bachelor’s degree in Finance and Economics from Washington University in St. Louis.

Denise Katz

Director Asset Management

Denise Katz manages Cityview’s core and development assets across multiple investment vehicles and is responsible for maximizing the operational and financial performance of the assets.  Denise has over twelve years of experience in real estate. Prior to joining Cityview, Denise was Regional Vice President at CIM Group of a $2.4 billion portfolio in the Western US and Latin American markets. During her time at CIM, she managed end-to-end transitions of development projects, acquisitions, and dispositions of office, multifamily, retail, parking, condominium, and mixed-use projects. She holds a double major Bachelor of Arts degree in International Studies and Psychology from Wilkes University in Wilkes-Barre, PA.

Steve Roberts

Director, Development and Construction
Steve Roberts is responsible for the development of several of Cityview’s ground-up multi-family assets, including due diligence, design, entitlement, permitting, construction, and market delivery. Prior to joining Cityview, Steve managed several nationally award-winning projects as Vice President of Development for Community Dynamics, a Santa Monica based developer of residential and mixed-use communities. Steve has built his career on creating exceptional communities that deliver high-quality housing to residents, first-rate design for neighbors and municipalities, as well as strong financial returns to investors. Steve holds a BA in Urban Studies and Planning from UCSD and earned an MBA and Master of Real Estate Development from the University of Southern California.

Anh Le

Director, Development

After 8 years in the construction industry managed complex multi-use development projects, Anh Le joined Cityview in 2018 as Director of Development. Le manages ground-up developments in Northern and Southern California and leads consultant teams through entitlement, design, permitting, budgeting, contracting, construction management and project turnover. She works closely with designers, neighborhood groups and Cityview’s in-house Asset Management team to deliver best-in-class multifamily projects. Prior to Cityview, Le worked as a project engineer and project manager at Cobalt Construction. Le holds a Bachelor’s of Science in Civil Engineering from the University of California, Irvine.

Kyle Naye

Senior Director, Acquisitions

Kyle Naye is Senior Director, Acquisitions of Cityview.  As Senior Director of Acquisitions, he is responsible for managing acquisitions, including sourcing, underwriting, closing and developing comprehensive business plans for investors.  Naye primarily focuses on non-California markets across the Western U.S., including Seattle, Portland, Denver, Phoenix, Salt Lake City, Dallas, and Austin.  In his role, Naye works closely with the Cityview team to manage and expand strategic acquisitions across the firm’s vertically integrated platform.

Prior to joining Cityview, Naye was a vice president of originations at PGIM Real Estate, where he provided transactions and underwriting oversight for core-plus and high-yield debt vehicles. He also held a prior role at PGIM managing the underwriting, investment committee preparation and closing of $992 million in multifamily, retail and office assets across the Bay Area and Pacific Northwest. At earlier stages of his career, Naye was a senior associate of acquisitions at Clarion Partners, senior real estate analyst at Northmarq and an officer in the United States Navy.

Zory Grigoryan

Director, Development

As Director of Development, Zory Grigoryan is responsible for the full cycle development of several of Cityview’s projects, which includes managing the due diligence, underwriting, entitlement, design engineering, construction processes and turnover to asset management. Prior to joining Cityview, Grigoryan worked for Oakmont Capital as a Project Manager overseeing the development and construction of several multifamily projects. Prior to that, he worked at Cobalt Construction as a Project Manager on the construction of numerous mixed use and multifamily projects. During his career, Grigoryan has been responsible for the development, preconstruction and construction of over 1,500 units.

Grigoryan holds a Bachelor’s of Science Degree in Construction Management from the California State University of Northridge, where he was the top ranked graduate of his year. During his time at Cobalt Construction, Grigoryan was also selected as distinguished alumni by the CSUN department faculty and appointed as ambassador for alumni recruitment by CSUN construction management department’s board of governors committee.

Chris Brown

Director, Capital Relations

Chris Brown is responsible for capital raising and investor relations at Cityview. Chris has over seven years of real estate investment and capital raising experience. Prior to joining Cityview, he was a member of the Fund Advisory team at JLL working on equity capital raises for private real estate investment vehicles. Prior to JLL, Chris worked on the Portfolio Management team at Clarion Partners and the Asset Management team at LaSalle Investment Management. Chris graduated from Florida State University with a Bachelor’s Degrees in Finance and Real Estate. He is a general securities representative.

Dana Gomez-Gayne

Vice President and Associate General Counsel

Dana Gomez-Gayne manages the legal aspects of all project-related matters, including acquisition, development, management and disposition, and advises Cityview on corporate formation and maintenance, insurance, risk management and other legal matters. She was previously an Associate at O’Melveny & Myers LLP and Manatt, Phelps & Phillips, LLP where she represented a variety of clients in real estate, project development and finance transactions. Gomez-Gayne also has a background in fundraising development and worked at Teach For America raising philanthropic funds from regional and national corporations and foundations. She is a graduate of Pomona College and Pepperdine University School of Law.

Rob Lester

Managing Director, Business Development & Capital Relations
Rob Lester is responsible for business development and capital formation efforts for the Firm’s investment platforms, developing strategic growth initiatives, and creating long-term relationships with investors and partners. He has nearly 25 years of investment banking and private capital formation experience. Prior to joining Cityview, he was Managing Director with Macquarie Capital, and a Managing Principal with Blackstone. ​

Con Howe

Managing Director

Con Howe leads Cityview’s partnerships to finance, assemble and entitle land for development in the greater Los Angeles area. With over 40 years of experience in planning, entitlements and development, he assists all Cityview funds with acquisitions and development strategies. Prior to coming to Cityview he was the Director of Planning for the City of Los Angeles responsible for the Adaptive Reuse Ordinance and zoning to encourage infill housing. Previously he was the Executive Director of the New York City Planning Department.

Shane Robinson


Shane Robinson is responsible for managing all aspects of Cityview’s stabilized, value add and new development assets. With more than 22 years of experience managing multifamily assets, he is a seasoned real estate professional experienced in a range of investment strategies that drive growth and efficiency for investors.

Prior to this role, Shane held pivotal positions at various organizations in the real estate industry. As Vice President of Property Management at Westhome, Robinson played a vital role in implementing the operational infrastructure that facilitated market expansion.

During his tenure at Sunrise Management, his leadership established and solidified the company’s operational foothold in new markets, contributing to the growth and success of the firm. His early asset management career was at GHP Management, where he specialized in lease-ups and effectively managed a substantial core portfolio of over 5,000 units.

Melissa B. Delgado

VP, Asset Management
Melissa Delgado is responsible for overseeing Cityview’s asset management and portfolio operations. Prior to joining Cityview, Melissa was a Senior Director at TruAmerica Multifamily LLC where she was responsible for achieving the investment objectives of an $800 million portfolio. Earlier in her career, Melissa was an asset manager for Kennedy Wilson’s Southern California portfolio. Prior to that, she was a Vice President and Head of Marketing at Kepler Capital Markets, an investment bank in New York. ​

Devang Shah

Managing Director, Acquisitions

Devang Shah is co-head of Cityview’s acquisitions activities on the West Coast. He has 25 years of experience in real estate investment, development, design, construction and asset management. Previously, Devang was the principal of Marketcents Inc., an independent project management firm, serving as an owner’s representative to investment firms, builders and developers. Prior to that, he worked was Vice-President at RCLCo, LLC, a national independent real estate consulting firm. ​

Adam Perry

Senior Vice President, Development and Construction

Adam Perry oversees all aspects of the commercial real estate development process from acquisition due diligence and entitlement processing through design budgeting, contracting, construction management, closeout and turnover. Prior to joining Cityview, Adam worked at CIM group as an Associate Vice President of Development overseeing ground up retail, office and mixed-use developments. ​

Adam holds a BA Degree in Political Science and History from UCLA and an MBA from the UCLA Anderson School of Management.

Matthew Falley

General Counsel & Chief Compliance Officer
Matt Falley oversees and directs the company’s legal affairs and is the firm’s Chief Compliance Officer. Matt was previously a partner at Greenberg Glusker Fields Claman & Machtinger LLP, where he represented numerous clients in the real estate industry, including Cityview. Matt holds a B.A. from the University of California, Santa Barbara and a JD from the University of California, Berkeley School of Law (Boalt Hall), where he was a member of “California Law Review” and Order of the Coif.​

Tony Cardoza

Managing Director, Acquisitions
Tony Cardoza is responsible for Cityview’s acquisition activities throughout the West Coast. He has 21 years of experience in real estate investment and management. Previously, Tony ran the investment group for Real Estate Capital Partners in the Western U.S., which developed and acquired over 5,000 multifamily units. Prior to that, he worked for Prometheus Real Estate Group in a land and multifamily acquisitions role on the West Coast. Tony holds a B.A. in Economics from Middlebury College and an MBA from the Haas School of Business at UC Berkeley.​

Jennifer Halvas

Managing Director, Investor Relations
Jennifer Halvas leads the firm’s investor relations team, where she is responsible for maintaining relationships with the investor community, bolstering infrastructure for new and existing investors and helping to develop investment strategies and initiatives. She has been instrumental in securing capital needs for several Cityview funds across a broad base of institutional investors, insurance companies, foundations and endowments, family offices and high-net-worth investors. A 12-year veteran of Cityview, she uses her deep institutional knowledge to create value for investors and the communities in which Cityview works.
She was previously at O’Melveny & Myers LLP, where she represented a variety of clients in real estate, project development and finance transactions. Jennifer holds a B.A. with honors from the University of Southern California and a JD from Vanderbilt Law School.

Damian Gancman

Chief Operating Officer and Chief Financial Officer

Damian Gancman oversees the operations of Cityview and its investments while supporting the strategic growth of its finance, acquisition, asset management and property management functions. An 18-year veteran of the firm, Damian is also a partner at Cityview and a member of its investment committee. As CFO, he helped build out Cityview’s best-in-class finance department, including the implementation of strategic process, accounting, reporting and technology improvements that enhance the investor experience.

In addition to his role at Cityview, Damian is a guest lecturer for the University of Southern California’s Master of Real Estate Development program and is a key contributor to the Cityview Leadership Academy. Damian earned a master’s degree in real estate development from the University of Southern California and a dual bachelor’s degree in business administration and psychology from the University of California, Berkeley.

Sean Burton

Chief Executive Officer

Sean Burton has been with Cityview since 2003. Prior to joining Cityview, Sean was vice president of corporate business development and strategy at Warner Bros. Before that, he was an attorney in the real estate and corporate groups at O’Melveny & Myers, LLP and also served in the White House during the Clinton Administration. In 2022, Burton was appointed by President Biden and confirmed by the U.S. Senate as the federal nominee on the Metropolitan Washington Airports Authority Board of Directors, which oversees Washington Dulles and Reagan National airports. He also serves as co-chair of the Los Angeles Coalition, a coalition of business leaders for the economy and jobs in LA. From 2013 to 2021, Sean served as President of the Board of Airport Commissioners which oversees the LAX and Van Nuys airports. Sean holds a B.A. from the University of California, Irvine and a JD from New York University School of Law.