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6/24/14
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A 22-unit multifamily property in the North Hills area of the San Fernando Valley sold for just under $3 mil. The property, located at 8805 Orion Ave, south of Nordhoff St on the east side of the 405 Fwy, trade for $2.965 mil, or $134.8k/unit.
Constructed in 1964, the building contains five one-bedroom/one-bath units, 15 two-bedroom/one-bath units, and two three-bedroom/one-and-one-half bathroom units. Based on in-place income, the property sold at a 10.09 GIM and 5.84% CAP Rate.
Rick Raymundo of Marcus & Millichap Real Estate Investment Services represented the out-of-state seller, a private LLC. New financing was provided by JP Morgan Chase NA.
"The biggest hurdle in this sale was the prepayment penalty on the existing financing," explains Raymundo. "A yield maintenance fee in excess of $280k for a loan with an unattractive 6.54% interest rate was difficult for buyers to digest, but we were able to take advantage of favorable market conditions and restructure the sale for our client, which allowed the seller to cover the prepayment penalty and still meet their proceeds target."
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