He founded Claridge Properties more than 20 years ago in Brooklyn, N.Y., but relocated the firm to downtown in 2012.
Pagan said he grew up “poor — I come from very low means.” When he was young, his father purchased a laundromat in Brooklyn where Pagan worked after school. He had a small business selling laundry detergent to the customers and would help his dad close at night.
He explained that his family had trouble finding quality affordable housing when they came to the U.S. from the Dominican Republic, which inspired him to want to make it easier for others.
In college, Pagan worked as a rental agent and went on to list and sell homes. He used the money he made from his first sale to purchase his first investment property. Pagan said he started with a focus on Harlem before moving to other areas as well.
“I always saw the need for affordable housing as being key and something that wasn’t always there,” Pagan said.
After working on multiple projects in New York, Pagan expanded into other cities before moving his company to downtown L.A.
“He’s an unusual developer,” Michel Mein, founder of New York-based Seventh Art said. “He’s not (from) a super-well connected New York family that is continuing a legacy. He started from scratch and as a minority owner was able to pull this off, which isn’t easy.”
Mein is a former architect who now advises developers and architects on real estate branding. He has worked on Pagan’s visuals.
Today, Claridge Properties does roughly 60% value-add properties and 40% new developments. Its portfolio is 3.7 million square feet.
Some of the company’s biggest projects were the Book Tower Complex in Detroit, which includes the 38-story Book Tower and the 13-story Book Building; The Gretsch Building in Brooklyn, a 210,000-square-foot factory that Claridge, along with its partners, redeveloped into luxury condominium units with ground-floor retail; and the Pencil Factory in Brooklyn, which Claridge acquired for $83 million in 2010.
The fully minority-owned company now has two major areas of focus going forward: downtown and affordable housing.
Even though he thought it was “deserted” at the time, he saw a major opportunity to turn downtown into a destination.
The biggest change he is working on is Angels Landing, a $1.5 billion development at Fourth and Hill streets. Pagan partnered with New York-based Peebles Corp. and San Francisco-based MacFarlane Partners on the project, which is expected to have rental units, branded residences, hotels and retail.
“Downtown needs a center or beacon that can be like its epicenter,” Pagan told the Business Journal last year of his hopes for the project, adding that the project was more central than L.A. Live with a much-needed residential component.
Pagan declined to comment on the current timeline or changes being made to the project.
Nick Griffin, executive director of the Downtown Center Business Improvement District, said Angels Landing was a big deal for downtown’s future.
“That project embodies the next level for downtown,” he said. “It’s as significant and aspirational as the Grand LA project is for right now. The Angels Landing project will represent the next level. It’s a project that almost wouldn’t have been conceivable for downtown several years ago. Following on the tails of Metropolis and the Grand LA, it’s very much in reach for us.”
Nearby, Pagan said Claridge is working on a project a block away and is finalizing agreements for other properties.
“We’re not pulling back. Our commitment to downtown is firm, and we’re continuing on that,” Pagan said.
Pagan added that while downtown has some challenges, such as the number of homeless individuals in the area, it “fared better than I thought” it would during the pandemic, and a lot of projects are coming online in the area soon.
“Downtown’s future is strong. I believe that a city like Los Angeles needs a strong downtown,” Pagan said. “I’m completely committed to the future of what downtown is.”
Griffin said downtown’s increasing residential occupancy and rental rates all bode well for the area’s future.
Mein added that Pagan had a great vision for areas like downtown.
“He has a very good eye to understand where the next real estate opportunities are and putting deals together. To be a developer, you need to be half marketing person and half architect. You need to be a visionary and understand the potential of a neighborhood early,” Mein said.
“You need it so badly,” Mein said. “There’s such a demand in L.A. (for affordable housing) ... it’s good to have a developer like this that is willing to embrace it.”
In the last year and a half, Claridge has added roughly 1,500 affordable units to its portfolio.
“We buy a lot of these affordable housing communities and update them,” Pagan said. “We’ve put a lot of emphasis on that given the income inequality we’ve been seeing.”
Pagan said a large number of the company’s recent affordable housing acquisitions were in the Sun Belt.
“The migration speaks for itself. The amount of people who are going into the Sun Belt states is amazing. There’re a lot of people that have left Eastern and Western states,” he said.
In L.A., Pagan said cost can be a challenge when it comes to creating affordable housing, particularly for land and construction. Still, the company is working on these projects in L.A. It does not have a partner for its affordable units in L.A. but does in other states.
In the next few years, Pagan plans to “double down” on downtown as well as be more active in affordable housing.
“We want to be a leader in providing that type of housing to a sector that is always going to need it,” he said.
The company also plans to open an office in Atlanta later this year. Claridge already has offices in downtown, Brooklyn and Houston.
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