Starwood Capital Group to Develop Mixed-Use Opportunity Zone Project in the South Bronx
Real Estate In-Depth | May 14, 2019
NEW YORK—Starwood Capital Group announced on May 9 that an affiliate had reached an agreement to develop a 147,000 square-foot mixed-use facility in a designated Opportunity Zone in the South Bronx.
The 10-story development, located at 425 Westchester Ave., will be anchored by a PK-8 charter school and include office space for a non-profit organization as well as ground floor retail. Construction is expected to begin this month.
425 Westchester Ave. will be one of the highest-quality schools in the Bronx. With modern finishes, state-of-the-art classrooms and double-height recreational gym space, the building will help meet the historically high charter school demand in the Bronx, New York City’s fastest-growing borough. As one of few new construction Class A properties in the Bronx, the property has a variety of unique features including floor-to-ceiling windows, open plan offices and more than 11,000 square feet of outdoor space.
“The Bronx is New York City’s fastest growing borough and we see continued opportunity to help bring new investment in the services, schools, office space and retail that have long contributed to the Bronx being such a vibrant community,” said Anthony Balestrieri, senior vice president and leader of Starwood Capital Group’s Opportunity Zone investment strategy. “We are thrilled to begin construction on 425 Westchester to bring a best-of-class charter school to the area that will serve hundreds of local families.”
Starwood Capital Group is headquartered in Miami.
“This project is representative of how Starwood’s Opportunity Zone business can deliver value-add projects to priority areas in our markets that benefit our partners and investors and serve the community,” said Christopher Graham, senior managing director and head of real estate acquisitions for the Americas of Starwood Capital Group. “As Starwood grows its Opportunity Zone investment portfolio, we will look to capitalize on market opportunities to identify attractive projects and deliver significant value for our investors and to the neighborhoods they serve.”
Starwood Capital announced the formation of its Opportunity Zone initiative on Jan. 30, 2019, to ensure the success of its ongoing investments in Opportunity Zones, which were created by the 2017 Tax Cuts and Jobs Act to offer investors certain tax advantages for developing and operating assets in designated Opportunity Zones.
The global private investment firm hired Balestrieri in January as a senior vice president to lead Starwood Capital’s Opportunity Zone investment business. Balestrieri joined Starwood from MetLife Real Estate Investors, where he most recently served as director and head of acquisitions in Washington, D.C., effective immediately.
Starwood Capital stated that it will focus its Opportunity Zone strategy on markets in regions where the firm has developed a strong real estate presence, including the West Coast, Southeast and large metropolitan markets such as New York City and Washington, D.C.
Starwood Capital Group is a private investment firm with a core focus on global real estate, energy infrastructure and oil & gas. The firm and its affiliates maintain 13 offices in five countries around the world, and currently have approximately 4,000 employees. Since its inception in 1991, Starwood Capital Group has raised $45 billion of equity capital, and currently has in excess of $60 billion of assets under management.