LOS ANGELES—Stream Realty has secured a $49 million loan for the acquisition and renovation of the Pacific Center, a 302,638-square-foot office building in Torrance, CA, GlobeSt.com reports exclusively. In an earlier story, GlobeSt.com reported that Stream Realty purchased the property from Bixby Land Co. for $68.5 million. Bixby Land had already invested $6 million into property renovations after buying the building for $52 million in 2013.

The financing for the property is a non-recourse, four-year interest-only loan with a floating rate, funded through a national bank. “Through an extensive marketing process, there was significant interest generated across the capital spectrum due to the high quality of the asset, the strong office market trends in the south bay, and the experienced sponsorship,” Kevin MacKenzie, senior managing director at HFF, tells GlobeSt.com. MacKenzie secured the funds on behalf of the borrower, along with HFF associate director Brian Torp.

Located at 21250 Hawthorne Blvd. in Torrance, the property is LEED certified and has an 80% occupancy rating, thanks to a wealth of capital improvements performed by Bixby, including significant exterior renovations, the inclusion of eco-friendly landscaping and interior improvements to common areas. To bring the occupancy levels up higher, Stream plans to make further improvements to the lobbies and un-leased interior units, as well as for leasing concessions. According to Stream Realty's Colby Annett, the financing is a perfect fit for the company to carry out its business plan. “The quality of the asset combined with strong fundamentals in the market made the debt placement a smooth process,” he says. With additional improvements, Bixby was able to bring the building occupancy up nearly 20% in less than two years with 55,000 square feet of leases signed.

The competition for this loan reaffirms the ample capital in the marketplace chasing deals, even for properties that have experienced struggling occupancy. Additionally, we are hearing more and more about debt placements that have reached as high as 90% LTC, like the recent debt placement for the Juanita Tate Marketplace. Optimus Properties purchased the retail center for $24 million and secured a $22 million loan with 10-year fixed rate at 4.187% and two years interest-only followed by a 30-year amortization. The LTV on the loan was also moderately high at 76%.