$4,475,000 LOAN FOR A MULTIFAMILY PROPERTY IN LOS ANGELES, CA
Continental Partners successfully arranged a 5-year, fixed loan of $4,475,000 for the acquisition of a Class “A” apartment building in Los Angeles, CA.
Summary: Continental Partners successfully arranged a 5-year, fixed loan of $4,475,000 for the acquisition of a Class “A” apartment building in Los Angeles, CA. The Sponsor requested a fixed-rate, non-recourse loan with one year of interest-only and needed to close inside of 30 days from application. This 13-unit apartment community has been completely rehabbed over the last year and consists mainly of one and two bedroom units, which include private balconies and roof decks offering unobstructed views. The townhome style units provide an abundance of natural sunlight due to the oversized windows and vaulted ceilings, which reach a height of 17-feet. The Property is conveniently located adjacent to the highly desirable Playa Vista submarket, less than 15 minutes from LAX and offers quick access to the 90 and 405 freeways.
Opportunity: Continental Partners approached a number of Lenders with this request including banks and credit union relationships. A number of Lenders who quoted the transaction were coming up with a loan amount short of the Sponsor’s request, mainly because the loan dollars per square foot were too high. Also, lenders were skeptical about the strength of the property due to the lack of seasoning shown historically in the financials; most of the units had less than 60 days of rent collections. The property was only 60% occupied at the beginning of the acquisition process. The Borrower needed a lender who would be comfortable moving forward with the loan contingent on a stabilized occupancy by the close of escrow without a collection history.
Result: Continental Partners was able to procure a Lender who understood the asset, the submarket and the Sponsor’s business plan. Continental was also able to avoid a potential appraisal issue by conducting an extensive market survey using rent comps; which confirmed comparable monthly rental rates and gave all parties involved comfort to move forward. The entire transaction took 30 days to close from loan application.