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12/09/14
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Mitch Paskover, President of Continental Funding Group (CFG), has arranged a $41 mil construction loan for the development of a new Class A apartment project in Downtown Los Angeles. The project, slated to contain 218 residential units over five floors, is called Valencia.
Valencia, located in the emerging Central City West residential community of downtown Los Angeles, will also contain 4.5k sf of ground floor commercial space. The 1.5-acre site encompasses nearly an entire city block fronting Wilshire Blvd at Valencia St. It is adjacent to the 408-bed Good Samaritan Hospital which is undergoing an $80 mil expansion and currently employs 2,375 staff and 650 physicians.
The borrower is an active investor and developer with a portfolio of commercial and residential properties. He focuses on a number of Greater Los Angeles neighborhoods, including Downtown, Beverly Hills, Hancock Park, Hollywood, Westwood, Inland Empire and Valencia.
The financing was secured through a bank that specializes in multifamily construction debt. The interest-only loan is LIBOR-based and has a loan-to-cost ratio of 70%. The term of the loan is three years with two one-year options. It was structured with enough proceeds to pay off an existing land loan and to provide funds for all future hard and soft costs along with an interest reserve.
Commenting on the loan transaction, Paskover noted, "The borrower requested we find a lender that would originate the entire loan on its balance sheet so it would not have any syndication risk. In addition, we were also able to convince the lender to use the current market value of the land to lower the overall equity required by the borrower to close the loan.”
Units at Valencia will have approximately 9’ ceilings along with washer/dryers and private balconies. Amenities include; over 20k sf of dedicated open/recreation space covered with lush resort-style landscaping, BBQ areas, pool, spa, fitness center, a 5k sf outdoor garden and a club lounge. In addition, 244 bicycle spaces have been incorporated into the design for the increasingly environmentally-conscious walking population.
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