Arnaz 4
Ground Up Development: 4-unit Townhouse Luxury Apartments
Los Angeles, California 90048
PROJECT OVERVIEW
Arnaz 4 is a boutique ground-up development of four luxury townhome residences located in a highly supply-constrained infill submarket near Beverly Hills, West Hollywood, Melrose, and Robertson Boulevard. The project delivered rare new-construction residential product in one of Los Angeles’ most high-barrier-to-entry corridors, where zoning, entitlements, and neighborhood opposition significantly limit new supply.
The project represents a successful execution of a time-sensitive entitlement strategy, transforming an underutilized triplex into a fully leased, stabilized, Class-A asset within a compressed investment timeline.
Investment Objectives
Ownership was looking for a Joint Venture partner to identify the highest and best use of a parcel that was previously acquired as part of a 1031 exchange, with intent to eventually redevelop. Investment objective was for a relatively low-risk return of capital in an infill Los Angeles submarket (within a short project timeline of 2-3 years). The existing property to be redeveloped was a triplex on approximately 6,500 SF lot.
Joint Venture Investment Objectives:
Capital preservation with defined downside protection
A short-duration, low-risk development strategy
Strong submarket fundamentals and walkable location
Exposure to rent growth via brand-new product
Clear exit optionality at stabilization
Arnaz 4 met these objectives through disciplined site selection, ministerial entitlement execution, and tight construction management.
Strategy
We initially conducted a feasibility study for the property and underwrote several scenarios, including a 13-unit podium-style apartment project with underground parking vs. a mid-block assemblage and larger development vs. the 4-unit townhouse style luxury apartment.
A key component of the future project viability was the passing of California Senate Bill 330 (SB 330), known as the Housing Crisis Act of 2019, which was passed by the legislature and signed into law by Governor Gavin Newsom in October 2019, and took effect on January 1, 2020. Included in the bill were limitations governing replacement requirements for existing units. It became apparent that timing was going to be of the essence here, both for the client and as a race against potentially burdensome legislative development restrictions, so the focus shifted to the fully ministerial, less capital intensive, 4-unit townhome project which could be permitted on the path of least resistance and prior to any legislative hurdles taking effect.
Execution
Century Park engaged a team comprised of architects, engineers and interior designers, sourced a third-party contractor, and undertook project management fully in-house. The project received all permissions prior to the bill taking effect. The existing triplex began demolition in 2022.
As the project progressed, rental demand grew stronger in the immediate area, and we took a specific focus on interior and exterior finishing and design details, appliances, design features and other elements that would maximize appeal for potential tenants and ultimately revenue for the partnership. The whole process was very hands-on during the 18-month construction timeline. After delivery in early 2025, Century Park managed the leasing of the units in-house and fully stabilized the project within a few months.
The result: A rare new-construction luxury product in a high-barrier-to-entry submarket, with a healthy yield on cost that met the objectives and risk profile of the partnership. All walking distance to Beverly Hills, West Hollywood, and all that Robertson/Melrose has to offer.
Exit Plan — Refinance and long term hold.
Key Return Metrics
| Metric | Result |
|---|---|
| Total Project Cost | ≈ $5.2 Million |
| Stabilized Yield on Cost | 5.98% |
| Stabilized NOI (Implied) | ≈ $311,000 annually |
| Timeline | ~24 months |
| Asset Status | Fully Leased / Stabilized |
| Estimated IRR | +/- 16% |
Return Drivers
Regulatory arbitrage via SB 330 timing
Delivery of new luxury product in a supply-constrained market
Efficient commercialization and rapid lease-up
Short development duration with limited entitlement exposure