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4/08/16
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George Smith Partners (GSP) has arranged $30 mil in bridge financing for 3.48 acres of fully entitled multifamily development land and a 68.8k sf office building in Hollywood. The borrower is a local Los Angeles developer and their foreign-based equity partner.
The transit-oriented project is slated to include a combined total of 253 residential units, along with 4k sf of ground-floor commercial space. The site is within one-half-mile of the Netflix Southern California headquarters, and is situated across from a Super Target that is currently under construction.
GSP’s Malcolm Davies, as well as Kyle Henrickson and Teddy Stutz arranged the transaction. The financing will assist the client in the disposition process of the existing office property, as well as construction of the parking structure and completion of construction drawings and permits to prepare the multifamily site to break ground.
“Phase I of the business plan is to finish cap ex, tenant improvements, construction of a parking garage on the adjacent lot, and sell the existing office building. Phase II of the business plan is to develop two seven-story multifamily buildings on the remaining land,” Davies notes.
“This is a unique project in a rapidly growing neighborhood,” says Davies. “There is a migration underway in Hollywood as companies move East, past the 101 Fwy. This planned project will capitalize on the demand that is rising from this movement.”
“Even with the obvious strength of the planned project, the existing single-tenant office structure presented an initial challenge for lenders,” explains Davies. “When the loan process began, the office building was vacant, resulting in no cash flow on the site.”
During the loan process, the site owner secured a 130-month lease with a financial technology company that will occupy 100 percent of the building. The in-place office lease and continued strength of the multifamily market allowed for the development of the parking garage, which will serve both the office building and the future multifamily project.
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