Sonnenblick-Eichner Co. has arranged $27.4 million in construction financing for Blatteis & Schnur’s upcoming speculative retail development within the Third Street Promenade shopping district in Santa Monica, Calif.
Civitas Capital Group provided the funds, Commercial Observer reported. The non-recourse loan was priced at 550 basis points over SOFR. The debt package will finance the replacement of a 77-year-old mixed-used building that was demolished last year.
Set to take shape at 1404-1408 Third St., the three-story, 25,000-square-foot retail building will feature approximately 50 feet of retail frontage and include a 2,500-square-foot roof deck. The development will rise adjacent to the Nordstrom-anchored, 475,000-square-foot Santa Monica Place mall and 1 mile from Santa Monica Pier.
Third Street Promenade comprises three blocks of pedestrian-only space, creating an open-air retail area that spans more than 200,000 square feet. A wide range of retail destinations, dining options and entertainment venues are present within the shopping district.
CBRE research indicates that there still is significant caution in the retail sector when it comes to development, as evidenced by the lowest-ever recorded level of deliveries, at 5.1 million square feet in the first quarter. Additionally, retail construction starts during the same period amounted to only 4.8 million square feet, reflecting the ongoing pattern of prudent development.