This Week's LA Deal Sheet
Walker & Dunlop arranged a $11.4M refi–first mortgage loan to Sunkist Shopping Center in La Puente. The 170k SF center is anchored by Rite-Aid and Big Saver Supermarket.
Walker & Dunlop VP Mark Grace (skiing with 2-year-old Rowan, the middle of his three boys) led the Walker & Dunlop team that structured the CMBS deal with Starwood Mortgage Capital. He tells Bisnow that the borrower, a family office in SoCal, had been out of the debt market for a number of years and needed guidance to gear up for the refi. That meant working on lease maturities and making sure the property was organized in a way that would be attractive to a lender. Notably, the center had a vacant outpad that was being re-tenanted with a national credit tenant; the lease hadn't commenced, so there wasn't any cash flow. Mark says that in the CMBS world, deals with this issue are tricky and often end up becoming complicated, requiring completion guarantees.
Ultimately, this to-be-constructed portion of the center was carved out of the collateral. In addition, the center had a lot of near-term lease rollover. The borrower was receptive to Mark's coaching and worked with the tenants on early lease renewals. He notes that with some of the CMBS maturities coming due, you're going to see many strong operators that may not be very active in the debt markets. The message? They'll need to be proactive and collaborate with their mortgage banker and lender to get better execution and terms, he says.
SALES
Ness Holdings bought a single-tenant restaurant in Venice (1637 Abbott Kinney Blvd) and a 36-unit apartment building in central Hollywood (5535 Carlton Way) for $7.4M and $7.5M, respectively. The company plans to reposition the restaurant building, which currently houses Wabi Sabi Sushi, by bringing in a high-end eatery or converting the property into a fashion retail store. Ness, a privately funded real estate investment and development firm, plans to launch a full rehab program and modernize the apartment building, which it acquired for cash in an off-market deal.
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K.C. Restoration Co bought 1514 W 130th St in Gardena, a 19k SF industrial building, from AIM United LLC for $1.7M. Heger Industrial's Thomas Holland, Brad Giles and Robert Thornburgh repped the seller, and Wolf Commercial's Jeff Politz repped the buyer.
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Glendora Park Place Apartment Homes, a Class-A, mixed-use property on historic Route 66 in Glendora (633-641 W Route 66) traded to a private, out-of-state buyer for $14.5M or $303/SF. The property, which is 95% occupied, consists of three ground-level commercial spaces as well as 50 studio, one- and two-bedroom apartments. Berkadia's Peter Hauser negotiated the deal.
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Ness Holdings sold a retail center at 7300 Melrose Blvd in LA to Black Equities for just under $5.4M. The property houses Floyd’s Barbershop and The Dark Room, a popular bar/restaurant. Ness bought the property for $3.8M in July 2013 and initiated a repositioning program, during which it renegotiated the anchor tenants’ leases as well as vacated and re-tenanted additional spaces.
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Charles Dunn Co sold an office building at 3211 Cahuenga Blvd in West LA for just under $3.9M cash. The two-story building contains more than 12k SF and is fully occupied by several tenants. Roger Beck, who repped the buyer, says the locally based LLC had been looking for a well-located office investment for over a year, and pricing had risen more than $50/SF due to the lack of inventory and buyer demand. Stacy Vierheilig-Fraser repped the seller, a private investor in LA.
LEASES
DHL inked a six-year lease extension valued at $11.9M for its air freight hub in Redondo Beach (4000 Redondo Beach Ave). The facility, which employs 150 people, takes up nearly 235k SF or most of a larger building. It features 50 dock-high positions, 23-foot clearance and 52k SF of office space. The Klabin Co/CORFAC International's Todd Taugner, Frank Schulz and David Prior repped DHL.
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The Salvation Army signed a five-year lease for more than 17k SF at 1258 Saviers Rd in Oxnard. Todd Nathanson, Jonathan Daniels and Igor Shekhtman of illi Commercial Real Estate repped both sides.
FINANCING
Walker & Dunlop structured a $7.9M construction loan from City National Bank for a townhouse project in Sherman Oaks. The borrower, ALEMAR LLC, plans to redevelop an apartment property it has owned since the 1970s by constructing an 18-unit townhouse community over a subterranean parking garage. Geoffrey Arrobio, who led the Walker & Dunlop team, says the 18-month IO loan exemplifies the current trend of property owners repositioning their existing multifamily assets to enhance the surrounding market area.
CONSTRUCTION/DEVELOPMENT
BRIDGE Housing and its partners held a ribbon-cutting ceremony to mark the grand opening of Sage Park Apartments, a 90-unit affordable complex for familes. Built on 3.5 acres on the north side of the Gardena High School campus, the $28M project was developed through a partnership between BRIDGE, the LA Unified School District and the LA Housing and Community Investment Department. Additional community amenities were developed on a one-acre parcel adjacent to Sage Park, including a joint use facility with two multipurpose rooms, an outdoor patio and a community garden, along with an obstacle training course that will be used by the LA Police Department for its Juvenile Impact Training program. Aimed at achieving LEED Silver, the new community was designed by Steinberg Architects and built by Portrait Construction.
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IVI International Inc, a CBRE company, has been retained to provide construction risk management services for the construction of Wilshire Grand Center in Downtown LA. The services include cost control, review of contract drawings and specs, review of construction and loan documents, schedules, permits and approvals. During construction, IVI will provide payment requisition review and approval services, among other services. The 2.1M SF project is slated for completion by February 2017. Korean Air and Hanjin International are developing the project, with Martin Project Management as the development manager, AC Martin Partners as architect-of-record and Turner as the GC.
KUDOS
Servicon Systems chairman Michael Mahdesian received the Chairman’s Sustainability Award from the Los Angeles Business Council at the LABC’s 2015 Sustainability Summit, held Friday at the Getty Center. The award recognizes the Mahdesian Learning Center & Client Innovation Hub, the first building in Culver City to earn LEED-New Construction Platinum cert. The project transformed an old, windowless warehouse into a light-filled office, event and training facility for the green custodial services company's workforce. The building houses the Servicon Academy and its new certification program; it's also open for use by Servicon’s clients and partners, as well as the community for events, meetings and training.
EXECUTIVE NEWS
Tim Foutz, who was named CEO of NAI Capital last month, was elected to NAI Capital's five-member board of directors. The board also appointed NAI Capital COO Michele Stein as secretary and senior EVP Richard Gold, the firm's broker of record, as treasurer.
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Keith Greville, a civil engineer and project manager in the LA office of Arup, was elevated to associate principal. He specializes in major infrastructure projects and is currently managing the firm's efforts on the $1.3B Crenshaw/LAX Transit Corridor in LA. Keith began his career in Ireland.
