LOS ANGELES-Those who follow @GlobeStcom on Twitter may have seen a post teasing the announcement yesterday, but GlobeSt.com has exclusively learned that Beech Street Capital LLC has provided $18.6 million Fannie Mae conventional loans to finance a portfolio of two Los Angeles properties: the Sanderson Apartments and La Luna at Beverly Hills. The transaction was originated by Jonathan Wintner of Meridian Capital Group’s office here and was financed by Beech Street Capital as part of its correspondent relationship with Meridian.
The two companies worked closely with third parties to maximize proceeds and were able to secure a five-year interest-only period for both 10-year loans at an extremely low interest rate. “We had a borrower that is a top of the line operator with two high-quality assets, and a lender that understands the product and value,” says Wintner. “The synergy was in place to allow for nearly doubling the existing debt, with new fixed-rate loans at sub-4% interest rates.”
Both properties have undergone recent renovations to both the interior and exterior. Beech Street tells GlobeSt.com that La Luna at Beverly Hills was built in 1988, purchased in 1994 and 100% occupied at the time of underwriting, and that both La Luna and the rental comparables are outperforming both the market and submarket. La Luna consists of 40 luxury units with high-end finishes throughout and is located in a desirable area of West L.A. near Beverly Hills, which Beech Street tells GlobeSt.com is characterized as a premier residential submarket, since tenants are drawn by its cultural, retail, and entertainment amenities and proximity to high-paying office jobs (two-thirds of the submarket’s jobs are white collar). Given this demographic and the young average age of the population, there is a large base of renter demand. In fact, according to Beech Street, this market commands the highest rents in the metro area, since it includes neighborhoods such as Beverly Hills, Hollywood, Santa Monica, and Marina del Rey. Rental offerings range from ultra-luxury product to small, dense neighborhood product.
Sanderson Apartments, Beech Street continues, is located between downtown and the Koreatown area of West L.A. Built in 1968 and purchased by the borrower in 2000, it has 69 units including three guest units and was 100% occupied at the time of underwriting. Koreatown has good access to the employment centers in both of those areas, according to Beech Street, and is a more affordable alternative to the West L.A. area, but still has access to the same entertainment and recreational opportunities. Sanderson Apartments is primarily surrounded by other multifamily properties ranging in age from older lower-density projects to newer higher-density projects. Like La Luna, Sanderson and its rental comparables are outperforming both the market and submarket.
Beech Street has provided refinancing for a number of multifamily properties in California during the past couple of months. As GlobeSt.com recently reported, the company and Meridian provided $27.59 million Fannie Mae DUS loans for the refinance of a six-property multifamily portfolio totaling 311 units located in Los Angeles. The borrower was L’Abri Management Inc., a repeat client of Beech Street. Even more recently, GlobeSt.com reported that Beach Street is providing $53 million in Fannie Mae loans to refinance two Northern California multifamily portfolios consisting of six properties totaling 540 units. The transactions were originated by Beech Street’s senior vice president’s Greg Reed and Kristen Croxton.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
