A strip mall that once housed a Chipotle and a Veggie Grill near Douglas Park is set to become 320 apartments.

Cypress Equity Investments has secured a $170 million construction loan to build two eight-story mixed-use buildings at 2025 and 2501 Wilshire Boulevard, adding roughly 17,600 square feet of ground-floor retail to the corridor, according to Urbanize LA and The Real Deal. Tom Hayter, CEI's vice president of investments, announced the financing on LinkedIn in May 2026. The lender was not disclosed.

Both projects are moving forward under Santa Monica's off-site affordable housing pilot program, which lets density-bonus developments fulfill low-income housing requirements at alternative locations rather than within the same building.

What's planned

At 2025 Wilshire Boulevard, near the intersection with 21st Street, DLR Group has designed a 150-unit building above 8,600 square feet of commercial space. A three-level underground garage will hold 205 cars. The podium-style structure features a geometric cutout along its facade that exposes an interior courtyard to the street.

Five blocks east at 2501 Wilshire, directly across from Douglas Park, Ottinger Architects is designing a 170-unit building above 9,000 square feet of retail with a four-level subterranean garage for 253 vehicles.

CEI's Santa Monica pipeline

The two Wilshire projects join a third CEI development at 1902 Wilshire Boulevard, according to Urbanize LA, a 140-unit building designed by Patrick Tighe Architecture that broke ground earlier in 2026 under the same pilot program. Combined with a project at 234 Pico Boulevard, CEI now has 646 apartments in planning or under construction across Santa Monica, per The Real Deal.

The pilot program

Santa Monica's City Council voted 6-1 on Tuesday, August 12, 2025 to adopt the off-site affordable housing pilot, passing it as an emergency ordinance. The program was created to unlock dozens of stalled projects in a year when only two multifamily building permits had been issued citywide.

"We need to adapt our rules to this economy because it's not changing anytime soon," Councilmember Jesse Zwick said at the August 2025 meeting. "The status quo is not working."

Mayor Lana Negrete cast the lone dissenting vote, warning the program could amount to "modern-day redlining, just in a much subtler form" by pushing affordable units to cheaper land.

The pilot is capped at 1,000 units. Developers can build affordable units off-site with $150,000 per unit in gap financing, rehabilitate existing units, or pay in-lieu fees. Projects must have obtained permits by August 12, 2025, or secure new entitlements before December 31, 2026.

Market context

Santa Monica's multifamily rents fell 8.1 percent year over year as of spring 2026, the steepest decline in Greater Los Angeles, according to Apartment List. Zumper recorded an even sharper 12 percent annual drop over the same period. Despite the slide, Santa Monica rents remain 7 percent above the L.A. metro median, per The Real Deal.

No groundbreaking date or construction timeline has been announced for either the 2025 or 2501 Wilshire project.