- Rate: LIBOR+2.65%
- Term: 20 Months+Two - 6 Month Exts
- LTC: 80%
Transaction Description: Jonathan Lee and Adam Candler arranged the ground-up construction financing for a 65 unit multi-family site in the Koreatown neighborhood of Los Angeles, California. Sized to 80% of cost, the 20 month loan is priced at LIBOR + 2.65%, netting an all-in coupon of less than 3.0% today. Recourse is limited to the top 25% of the loan.
Challenge: There has been little recent construction in this market since the last real estate cycle; challenging sale comparables and rental market demand. Leasing demand and rental rates for high-quality residential could not be documented in this area.
Solution: Strong location metrics; access to transit, hiring velocity in local employment sectors and neighborhood entertainment drivers were major contributors to the lender narrative. Ultimately, the capital provider was comfortable with the sell-out analysis, and provided the full 80% of cost commitment.