CULVER CITY, CA—Runyon Group has purchased a 29,357-square-foot industrial property in the Hayden Tract neighborhood of Culver City with plans to reposition the space into a creative office building. To purchase the property and for a portion of the renovations, Runyon secured $13.3 million in financing, GlobeSt.com has learned exclusively. The purchase price for the property was not disclosed, but sources unrelated to the deal say that Runyon purchased the property for approximately $15 million. The repositioning project will be completed in spring 2016.

“Runyon was seeking a high LTC, low rate loan to finance the acquisition and renovation of the Book Bindery site,” Mike Yim, a managing director at Quantum Capital, tells GlobeSt.com. “The loan we secured for Runyon met all of their requirements; it provided the funds required to purchase the property along with the capital needed to renovate the one-acre site. A 72% LTC loan is extremely aggressive for a speculative project intended for creative office use.” Yim and his colleague Jonathan Hakakha, a managing director at Quantum Capital, secured the funds on behalf of Runyon.

The Hayden Tract is one of the hottest markets for creative office adaptive reuse. Runyon plans to build out the space with 22,000 square feet of creative office, 5,000 square feet of retail and an outdoor courtyard. The two-building property was built in the 1950s and was originally used as a book bindery for the University of California. Since 2010, the property has been used as a private event space. Runyon has another creative office development—a 72,000-square-foot site called the Platform—adjacent to this site. That project is expected to be completed in the fall of this year.

Although this area of Culver City is becoming a hotpot for creative office conversion, Quantum did have some challenges securing the financing for the purchase and the renovations. “The challenge of this transaction was identifying a lender wiling to offer a 70%-plus LTC loan for speculative creative office with no pre-leasing,” adds Yim. “The loan process went smoothly. Any concerns with the real estate and business plan were addressed prior to the issuance of a term sheet.”