It’s his professional base, too.
The Los Angeles native has become a notable player in the area’s commercial real estate scene, co-founding his own investment firm, LandSpire Group and striking strategic partnerships with other local investors over the past few years.
“Orange County is a mecca for commercial real estate,” Childress, who is estimated to have earned about $60 million during his 15-year NBA and overseas basketball career, told the Business Journal.
“The network here has exposed me to so many great groups and partnerships.”
Notable recent partnerships for Irvine-based LandSpire include several projects with Newport Beach Lyon Living—including a recent investment in the Newport Beach Marriott Hotel & Spa near Fashion Island—and a new initiative with Newport Beach real estate investor RevOZ Capital.
CRE Start
For Childress, real estate investment isn’t just about turning a profit; it’s about creating new opportunities in disenfranchised communities.
He first became interested in using real estate as a means to support economic mobility at Stanford University, where he played three seasons of college basketball before signing with the Atlanta Hawks in the 2004 NBA draft.
As the sixth overall pick in the NBA draft, Childress was the highest-ever pick for a Stanford player.
Well-known Silicon Valley investor John Arrillaga was the scholarship sponsor for Childress’ Stanford education, “which was my first exposure to the power of real estate,” Childress notes.
“I saw how [Arrillaga] could provide opportunities to kids like myself through real estate, and that planted the seed in me.”
Childress made OC his offseason home during his globe-trotting playing days. In 2008 he signed a three-year, $20 million contract with a team in Greece, twice what he would’ve made in the NBA and which reportedly made him the highest-paid basketball player outside the NBA in the world.
He stayed local when made his first commercial investment in 2018 when he acquired an Orange County shopping center and office building across the street from South Coast Plaza.
Sunflower Plaza, a roughly 27,000-square-foot property at the intersection of South Bristol Street and Sunflower Avenue in Santa Ana, was bought through affiliate Childress Ventures LLC for a reported $9.6 million.
LandSpire
Around the same time, Childress was starting up LandSpire with Stanford teammate and roommate, Justin Davis.
The duo was inspired by the creation of the Opportunity Zone program by the 2017 Tax Cuts and Jobs Act, which is designed to revitalize economically distressed communities through private investment, allowing investors to defer and avoid capital gains taxes on funds invested in designated communities.
“With all of the investment going into Opportunity Zones, we wanted to make sure there was a social component going into it,” Childress said.
“We were worried about seeing a bunch of capital going in to distressed communities and driving out local stakeholders. Our focus was to be on responsible investing.”
It does this by targeting value-add investment opportunities in secondary markets, using funds to create new projects to support the community, such as affordable housing, and develop new community programs and education initiatives to go along with it.
Lyon Living Ties
LandSpire has made three value-add investments in the past year, including one in Orange County.
Not all its investments are in distressed communities.
The company was involved in last year’s acquisition of Newport Beach Marriott Hotel & Spa, the priciest hotel sale in California for 2020.
The property in Newport Center traded in November for $216 million.
LandSpire became involved in the purchase of the 532-room property through a relationship with Lyon Living, the apartment investor and developer founded by the late Gen. William Lyon.
Lyon Living paired with hospitality investor Eagle Four Partners to buy the 10-acre hotel property at 900 Newport Center Drive.
Details for the future of the hotel have been kept relatively quiet, though sources indicate plans could include right sizing the property by decreasing the hotel room count and adding housing units.
LandSpire also partnered with Lyon Living in another recent value-add deal, partnering with the firm to develop a 294-unit apartment project in Las Vegas.
The two companies launched their business relationship through an investment opportunity in Santa Ana; though that deal fell through, the partnership remained intact.
“In working together on this deal we got to know them really well, and we liked that they approached deals differently than other companies,” said Peter Zak, president and chief operating officer at Lyon Living. “They have a keen sense of community and stakeholder needs, which makes them a great long-term partner for us.”
The third project LandSpire is currently working on is in Childress’ home city of Compton.
It has partnered with the Coalition for Responsible Community Development for a 75-unit affordable housing development in the city that will also include community initiatives like financial literacy classes and childcare programming.
“Compton is a perfect example of the type of neighborhood we want to invest in, and we plan on rolling out a number of other projects in the area in the future,” Childress said.
RevOZ Partner
Most recently, Childress paired with another local investment firm with a goal that’s in line with the objectives of LandSpire.
Newport Beach-based RevOZ Capital has tapped Childress to be part of a social impact council that will help advise the Opportunity Zone investor on a new pledge to invest $1 billion in projects across the United States.
“This is all about socially-responsible investing, which is what we try to do at LandSpire,” Childress said.
RevOZ, which stands for “revitalizing Opportunity Zones,” was founded by Alex Bhathal and Lisa Bhathal Merage, siblings who previously ran Tustin’s Raj Swim, one of the largest swimwear companies in the country.
They now run Raj Capital, the asset management platform of the Bhathals, one of Orange Country’s wealthier families.
Ryan Parkin and Tom Parnell, two partners at Newport Beach’s Cress Capital, are also partners in RevOZ.
The Bhathal family has a sizeable stake in the NBA’s Sacramento Kings and in properties around that team’s stadium in the state capital, but the company said they met Childress via non-sports connections.
The Bhathals first met Childress through Gen Next, a policy membership organization focused on addressing issues facing future generations, specifically in the education, economic growth and global security sectors.
Childress is one of seven bipartisan policymakers and executives that make up the social impact council of RevOz, which will meet with the company’s executive team on a quarterly basis to discuss new long-term investment opportunities and social impact strategy.
“Our goal is to build a nationally-recognized model that integrates social impact into real estate investments,” Merage said. “We feel we have a civil responsibility to invest in lower-income communities, especially in the wake of COVID-19.”
RevOZ has made six acquisitions to date, specializing in “often overlooked” secondary markets, Merage said.
The new $1 billion initiative—financed by debt and equity—will be used to fund ground-up developments and significant repositioning projects in disenfranchised communities.
Coming Up
For LandSpire, next up on the acquisition front includes potential deals in Texas, Sacramento, Atlanta and North Carolina.
For Childress, expect additional quiet involvement with other OC commercial movers and shakers, as well as a personal move of his own.
“I’ve lived in Irvine for most of the 15 years I’ve been in Orange County, but I recently bought a home in Anaheim Hills and I’m in the process of moving.”
