Related Fund, Newland Capital Buy Former Forever 21 HQ for $120M

Blackstone and Worthe Real Estate Group have sold the former Los Angeles headquarters of Forever 21 in a nine-figure deal, and the new owners plan to redevelop the property, Commercial Observer has learned. 

Related Fund Management (RFM), an affiliate of real estate juggernaut Related Companies, and Newland Capital Group paid $120 million for the 39-acre, 1.8 million-square-foot industrial and office campus in L.A.’s Lincoln Heights neighborhood, east of Downtown L.A., according to a source familiar with the deal. Details about acquisition financing were not immediately available. 

CBRE’s Barbara Perrier and Mike Longo brokered the deal, though Longo declined to comment. Worthe Real Estate also declined to comment, while representatives for Blackstone did not immediately respond to a request for comment.

Blackstone and Worthe in 2018 purchased the eight-building complex, at 3880 North Mission Road, from Forever 21 for $165.7 million, records show. Yet, the fast-fashion clothing brand filed for bankruptcy (for the first time) less than a year later, and officially relocated its headquarters in 2022 following the brand’s acquisition by Authentic Brands Group, Simon Property Group and a Brookfield affiliate in 2020. 

Forever 21 has since shuttered its 354 U.S. stores, although it kept many international outposts open and still sells men’s and women’s clothing and accessories through its website.

Blackstone and Worthe sought permits to demolish and redevelop at least part of the site in 2022, but then decided to market it for sale in early 2024. 

RFM and Newland expect to follow through on the redevelopment, soon to be dubbed Mission Crossing. The joint venture will demolish three of the eight buildings and replace them with a 280,000-square-foot industrial property, along with 280,000 square feet of underground warehouse and parking space; a roughly 11-acre industrial outdoor storage facility (which is also available as a 225,000-square-foot build-to-suit facility); and a “re-envisioned,” 670,000-square-foot flex industrial building. 

The buyers don’t plan on sitting on their hands, either. Construction on the redevelopment is planned to start in the next two weeks, with an anticipated completion by July 2026, Ivan Karpov, RFM vice president, and Ty Newland, Newland Capital CEO and managing partner, told CO. Conversations with prospective tenants are underway, but the pair declined to comment further about the future leasing at the site.

“We really like the flexibility of the site because it works for a variety of uses … and part of the beauty of this project is that we’re stepping into a situation where we can start construction very quickly.” Karpov said. 

New York City-based Related Companies is not as active on the West Coast as it is on its home turf or in Miami. Yet, the firm, which CO ranked as the fourth most powerful player in the industry, is involved in multiple high-dollar projects in Southern California through other subsidiaries.

That includes Related California’s $3 billion Related Bristol project, a sprawling mixed-use campus in Santa Ana. The development, which the Santa Ana City Council unanimously approved in October, is planned to feature some 3,750 residential units, 250 hotel rooms, 200 senior care units and up to 350,000 square feet of commercial space. 

The Related affiliate is also working on a 280-unit, mixed-use development in Santa Monica, for which the company landed a $385 million construction loan, as well as the $1.3 billion, Frank Gehry-designed development downtown called The Grand.

Nick Trombola can be reached at ntrombola@commercialobserver.com.