Markwood headquarters in Beverly Hills.
The company was founded in 2010 as a family office by two brothers in New York City, but James Mehdizadeh and Robert Mehdizadeh entered the Los Angeles market in 2005.
Markwood has put his mark on Los Angeles with approximately 315,000 square feet spread across five projects. The company’s portfolio includes an income-producing asset that will be redeveloped over the next few years, a parking garage and a project under lease.
Markwood began selling some of his assets in New York City while living in multi-family properties in Los Angeles.
“It’s the real estate sweet spot,” said Markwood CEO David Wright, who joined the company in 2012 and was named CEO in 2016. “He’s more insulated from market fluctuations. Retailing is very difficult. The pandemic is the perfect example. People always need a place to live, but they don’t necessarily need to shop at their local store or restaurant. Retail is a bit too volatile. “
Wright said the company wanted to develop multi-family assets rather than acquire existing properties.
“In LA, it’s really hard to find acquisition opportunities that make a lot of sense,” Wright said. “The prices are high, the expectations of the sellers are high, so for the buyer there isn’t much meat left on the bone.”
Markwood begins leasing a 13-unit building in Larchmont. In the coming weeks, the company plans to begin work on a 19-unit project in Mid-Wilshire as well as a 51-unit project with retail space in West LA. This latest project will include a fully automated parking garage, a feature that has allowed the company to pack more residential units on site.
“It’s a pretty small site, and to have regular parking, the descent ramp would have cut about 10 units and changed the entire building layout, and we would have lost 10 apartments,” Wright said. “We could only have parked around 20 cars on one level. We should have dug about 50 feet or 60 feet deep, and that’s prohibitively expensive. We had to look for parking solutions. “
The 19-unit Mid-Wilshire project will feature a semi-automated parking system.
“With the stackers, we were able to achieve the maximum density on the site. It’s an additional cost, but it comes back on its own, ”Wright said. “It pays off pretty quickly.”
Next year, Markwood plans to start a 66-apartment project in the Mid-City West / Melrose District.
Wright said that unlike other development companies, Markwood is interested in both small and large-scale apartment buildings and assesses “every site and every opportunity as it arises.” .
He added that the company analyzes a property’s overall returns rather than size, but smaller builds can sometimes be tricky.
“Small projects are more difficult. I really like the concept of these little infill projects, but… it’s harder to find general contractors who are willing to build small and lenders who are willing to lend small, ”he said.
The company is building Class A properties. Wright said Markwood is also considering projects that would have housing for workers.
“For workforce housing we’re looking more on the outskirts of downtown, South LA, West Adams, places like that where you can get development sites at a better cost. per unit. West LA is prohibitively expensive. We haven’t found anything in this area over the past few years that makes sense, ”he said.
Going forward, Markwood is looking to do more with modular construction.
“It’s not a huge cost savings per se, but it gets you to market faster,” Wright said. “This is the main advantage. And the standardization of the design makes the materials more efficient and the labor force more efficient. “
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