SANTA MONICA, CA—An institutional investor advised by J.P. Morgan Asset Management has secured a $260 million loan to refinance the Water Garden phase I, a two-building 673,660-square-foot class-A office building. The 12-year fixed-rate loan was originated by New York Life Real Estate Investors.
The project is part of a larger 1.27-million-square-foot office complex that sits on nine acres in Santa Monica. Phase I is currently occupied by Amazon, Edmonds.com, Group M Worldwide, Sony Computer Entertainment and AMC Networking Entertainment. Although it is unclear what the funds will be used for, the owners of the property are currently performing capital improvements to market the property to creative office users. In 2016, the EXPO light rail station will open across the street from the property, making this a major West L.A. asset, according to those involved in the transaction.
"This investment reflects our goal of investing in high quality financing opportunities that deliver long-term value to our policyholders and that align with our objective of seeking properties with excellent sponsorship in world class cities,” an unnamed spokesperson for New York Life Real Estate Investors tells GlobeSt.com. HFF senior managing directors Mike Tepedino and Paul Brindley and HFF director Jennifer Keller secured the funds on behalf of the institutional investor. They declined to comment on the transaction.
Like almost all of the sectors in the Santa Monica submarket, creative office space is in very high demand, with limited supply and steadily rising rental rates. Investors are scooping up the last available low-rise office properties in the area to convert them into creative office space. Recently, a private investor purchased the 100,000-square-foot Ocean Avenue Plaza office property from Broadreach Capital Partners for $47 million. Before selling, the seller invested $3 million into the property to add an open atrium and other features attractive to creative office tenants.
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Kelsi Maree Borland
