Weekend Interview: Primestor's Arturo Sneider On Developing LA's Underserved Areas

This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities that keep CRE interesting.

Arturo Sneider is the co-founder and CEO of Primestor Development, a Los Angeles-based retail property manager and developer. Since its founding in 1992, Primestor has focused on bringing quality retail and development to historically overlooked areas, including Pacoima, Watts and Norwalk. The company has a more than $750M portfolio and has a handful of larger mixed-use projects in various stages of completion across the city and county of Los Angeles. The company also launched a fund for transit-oriented projects and is more than halfway to its $300M goal. 

“Things have changed a lot since we started,” Sneider said, referring to growing interest in the markets where his company has based its business. 

Here, Sneider shares insights on his approach to retail and details on the company's largest project yet: a mixed-use redevelopment of the Panorama City Mall. 

Bisnow: In April, Primestor closed the first half of a new fund, the Urban Vision Fund, to the tune of $165M for projects near public transit in California, focusing on ground-up multifamily and retail. I hear a lot of talk about California being a bad place to invest and negative news about public transportation. Why are you focusing on transit-close projects in California, and what do you hope these injections of capital will do?  

Sneider: For a while, Primestor has been considering raising its own discretionary fund in order to pursue the strategy that the firm has used for about 30 years, which is about reimagining economic development in underserved communities. 

Public transportation is a catalytic force, particularly in communities that have larger family sizes, that are seeking to minimize their living expenses and minimize the complexity of their commute. The expansion of public transportation in California will be a game-changer.

In minority communities, where the company has been focused, we continue to see both population growth and a significant void when it comes to basic needs and services, whether it's on the commercial, neighborhood-serving side or on the housing side. That is where we continue to see opportunity. People need these things — quality retail, housing —  and someone stands to gain a lot by meeting those needs.

Bisnow: I saw that Primestor aims to bring that fund up to $300M in equity commitments by the end of this year. How do you do that? What does it look like to close that gap?

Sneider: I don’t wish it on anybody! As an emerging manager, even though we’ve been around for 30 years, raising a fund is a full-contact sport. We’ve been reaching out to investors, reaching out to those relationships we have. We have been fortunate enough that some of our previous joint venture partners and some new ones who have had great success with us have endorsed our effort. 

Bisnow: Are you targeting any particular areas for the projects that the Urban Vision Fund will go toward? Do you already have projects in mind?

Sneider: It is a discretionary fund, so we do have discretion, but at the same time, we have a pipeline that is already seeded for a big portion of this capital. We’re finishing drawings for a project we entitled last year in the city of Norwalk, at Norwalk Boulevard and Imperial Highway, where we’re doing a sizable mixed-use project of market-rate and affordable housing with entertainment-focused retail. Also in Norwalk, we’re working on a redevelopment of the original downtown. We’re doing housing and neighborhood-type retail. We’re also working on the redevelopment of the Panorama City Mall, the entitlement of which we’ve been working on for the better part of a year. It will run along a future Metro line at Van Nuys and Roscoe boulevards. 

Bisnow: The Panorama City Mall redevelopment would bring 4.5M SF of commercial, residential and hotel uses to a site bounded by Roscoe and Van Nuys boulevards, Chase Street and Tobias Avenue. Is it safe to say it’s Primestor’s biggest project to date? 

Sneider: It’s hard to say. We did a redevelopment project at Jordan Downs in Watts — part of a large master-planned development with housing, retail, a community center and a park. It’s hard to say which is more impactful and larger, but in its full form, I’d say yes, Panorama is probably our biggest. And with the push for densification, the city’s housing demand and the public transportation element, the community has been very receptive to what we're trying to do at Panorama. 

Bisnow: What’s the timeline for that project? 

Sneider: We’re looking at the summer of next year to be finished with entitlements. Then, because of the strength of its location and because of the dearth of opportunities for that community, the mall continues to operate fully leased, so we've got some planning around that to do with our tenants.

Bisnow: How do you determine what communities want in their retail centers? How are you choosing tenants for your properties, getting them into space and keeping them there?

Sneider: Things have changed a lot since Primestor started [in the early 1990s]. When we first started with our business model, almost no one was interested in our markets, and it took the better part of a decade to get any traction. Part of it was the lack of data and the lack of understanding of the market scale. Initially, we got ideas about which tenants to bring in through the community outreach process, which we do in-house. Now, we have repeat relationships with many, many businesses. That makes it easier.

Bisnow: You shared that Primestor’s retail space has a 98% occupancy rate, according to stats through the second quarter of this year across more than 2.5M SF of retail. How are you maintaining that? 

Sneider: A number of factors that play into that 98% rate. When you do the homework upfront about a community and what it is that it’s lacking, dig deep into the facts, you do get to a point where you can identify the demand and the supply disconnect that exists in that community. As the economy has changed, as the demographics of these communities change, we have kept our occupancy. 

We are three things: We are investors, we are developers and we are also operators. We market and program and outreach permanently. We do this for our projects ourselves without outsourcing, so we're constantly finding connection points, new ideas and new models to bring to our properties. 

Bisnow: Could you give an example of a time when you encountered a use or a tenant and you thought, ‘OK, maybe this would be a good fit,’ and you heard from the community that that was absolutely not what they felt they needed and how you dealt with that?

Snieder: When we did Plaza Pacoima in the San Fernando Valley, it was a site that had been vacant for a long time. [The property had once been a Price Pfister foundry.] After the plant was shuttered, the site sat idle for a very long time, and it had left quite a bit of contamination in the soil. As we started looking at what was physically possible on the site, we had interest from entertainment-oriented retail, but the community was incredibly clear with us that what they were looking for was a very strong commitment to hiring locally and paying living wages. After we completed the remediation and cleanup at the property, we ended up developing a Costco, Lowe's and Best Buy on-site. We delivered what they ultimately wanted.

Bisnow: Give us a bold prediction for the end of the year. 

Snieder: I would say it’s bold given the economic environment that we’re in: I think we will have closed our first fund with $300M by the end of this year.

Bisnow: What is your weekend routine or favorite weekend activity?

Snieder: Those are two very different things. My weekend routine is very much focused around Venice Beach, where I live — hanging out there, reading, listening to music, spending time with my partner. But my favorite weekend activity would be snow skiing. Whenever I’m snow skiing, that’s heaven right there.