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5/11/15
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Los Angeles-based developers Illusion Holdings LLC and Ocean Blue Investments LLC have obtained a $33 mil, short-term bridge loan to refinance The Medallion, a luxury apartment and retail development in downtown Los Angeles. The new loan was arranged by Quantum Capital Partners.
Located at Fourth and Main in downtown Los Angeles’ historic core, The Medallion features 96 luxury studio, one-, and two-bedroom apartments, 80k sf of street-level retail and a 275-car parking garage. A fully entitled two-acre development site adjacent to the improved property also secures the loan. Slated for the 300-unit second phase of the Medallion development, the development site is currently leased to a parking lot operator.
The borrowers were challenged to refinance the existing debt, which was in maturity default, within a short timeframe. Quantum’s Managing Directors Jonathan Hakakha and Mike Yim identified a lender who could underwrite and structure the financing quickly with a certainty of execution, and were able to complete the assignment in 10 days.
“The apartment component is 97 percent leased but the sponsor had struggled to stabilize the street-level retail space, making it difficult to find a lender willing to refinance the debt on the project,” said Hakakha. “Through diligent market research, we were able to substantiate the projected retail rental rates and identify a lender willing to take lease-up risk. The strength of the market, the value of the development site, and the sponsor’s track record mitigated the lack of stabilized retail occupancy.”
Once the street level space is stabilized, the sponsors will move forward with its development plans on Medallion 2.0 to meet the continuing demand for housing downtown.
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