LOS ANGELES-Meridian Capital Group LLC, a national commercial real estate and advisory firm, has negotiated $8 million in cash-out financings for two properties in the rapidly-gentrifying Koreatown area here.
The properties, located on Ingraham Avenue and Mariposa Avenue, are 1920's-era, master-metered brick multifamily buildings containing mostly studio apartments. The 10-year financing package was executed at a 75% loan-to-value and has a rate in the low 4% range.
Koreatown, as the name implies, is one of L.A.'s numerous ethnic enclaves. Many Korean-language businesses and billboards dot the streets. The neighborhood is extremely walkable, with many coffee shops, restaurants, karaoke bars, retail shops and nightclubs. The area is known informally as “K-Town.”
Ben Grossman, the Meridian managing director who negotiated the transactions, tells GlobeSt.com that Koreatown has one of the highest population densities of all L.A. neighborhoods. The area is also home to one of L.A.'s largest construction projects, the mixed-use the Vermont, a twin tower at the corner of Wilshire Boulevard and Vermont Avenue.
“There's been a tremendous amount of gentrification that has impacted the community in positive ways,” says Grossman, adding that affordable rents, mostly in the $1200-$1500 range for a one-bedroom apartment, are attracting those priced out of nearby West Hollywood and Los Feliz. “The density has also enticed business owners, who have historically had concerns about the lower income level of the area.” The area has a “big city feel” akin to Manhattan, Grossman says.
The condo market has been particularly active in Koreatown, Grossman says. “New buildings that hit the market are immediately absorbed because people have so much faith in the future growth of the area,” he says.
Grossman also recently closed $9.8 million in financing for Los Angeles metro area transactions, including $3.3 million in acquisition financing for a 36-unit multifamily property located in Koreatown. “Too frequently borrowers assume favorable financing is unavailable for 1920's vintage master-metered brick construction assets with a high percentage of studio apartments,” he says. “This is simply not the case.”
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