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Tag: Refinancing

  • Hackman, Affinius score $75M refi on Amazon-leased Culver Steps 

    Hackman, Affinius score $75M refi on Amazon-leased Culver Steps 

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    Lease a property to one of the biggest companies in the world — and L.A.’s hottest chains — and the financing will follow.

    Hackman Capital Partners and Affinius Capital have scored a $75 million loan to refinance Culver Steps, a 121,000-square-foot office and retail project in Culver City, according to property records and a report from Fitch Ratings. 

    Deutsche Bank and Wells Fargo provided the five-year loan, which has a fixed interest rate of 6.62 percent, according to the Fitch report. About 45 percent of the loan was packaged into a commercial mortgage-backed securities deal. 

    Hackman and Affinius — the formal name for a joint venture between USAA Real Estate and Square Mile Capital Management — completed the development in 2019. Wells Fargo, in an appraisal tied to the loan issuance, has pegged the project’s value at $130 million, or more than $1,000 a square foot. 

    Amazon.com leases the entire 80,000-square-foot office portfolio of the building, under a deal that expires in 2031, according to Fitch. The e-commerce giant has invested more than $10 million into the space. 

    Erewhon, a luxury grocer, holds a lease for about 15,000 square feet of the retail portion through 2038. Other retail tenants include ice cream shop Salt & Straw, Mendocino Farms and Sephora. 

    And the tenants have been a boon for the development. 

    The property’s net operating income soared 41 percent from 2022 to 2023, hitting $6.1 million at the end of the year. The lenders underwrote the deal with expectations net operating income will reach $8.6 million a year, according to Fitch. 

    Deutsche Bank’s new loan comes as the German bank works to dump about $1 billion worth of loans tied to commercial real estate in the U.S.

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    Isabella Farr

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  • Office, Retail Campus Gets Refinancing – Los Angeles Business Journal

    Office, Retail Campus Gets Refinancing – Los Angeles Business Journal

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    Office, Retail Campus Gets Refinancing
    Refinanced: Wateridge is a six-building mixed-use property in Ladera Heights.

    Wateridge, a six-building office and retail campus totaling 584,000 square feet in Ladera Heights, has received $65 million in refinancing.

    Jones Lang LaSalle Inc. worked on behalf of the borrower, Chicago-based LPC Realty Advisors I LLC, an investment advisory affiliate of Dallas-based Lincoln Property Co., to arrange the five-year, fixed-rate financing through Germany-based Deutsche Bank.

    “The LPC team has done a terrific job transforming Wateridge since their initial acquisition,” Chad Morgan, a director at JLL Capital Markets, said. “The combination of strong cash flow and institutional ownership within West Los Angeles were instrumental to the successful refinance. We greatly appreciate the efforts amongst all parties involved to execute in today’s challenging environment.”

    Morgan led the JLL Capital Markets team, alongside managing directors Todd Sugimoto and Mark Wintner.

    Wateridge, which is located at 5110-5150 Goldleaf Circle, spans 21 acres in total. The campus consists of three multi-tenant office buildings, a single-tenant medical office, a standalone 24-hour fitness facility and a multi-tenant strip retail center. 

    LPC Realty Advisors I bought the Ladera Heights asset for $135 million back in 2016 on behalf of a public pension-fund client. 

    It was 80% leased at the time of refinancing; tenants include Kaiser Health Foundation, the County of Los Angeles and Providence Health.

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    James Brock

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  • CalSTRS scores $70M Refinance on West LA Office Building

    CalSTRS scores $70M Refinance on West LA Office Building

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    Not all office buildings have trouble finding new money. 

    The California State Teachers’ Retirement System has scored a $70 million loan to refinance its 337,400-square-foot office building at 11755 Wilshire Boulevard, according to property records filed with Los Angeles County. 

    Wells Fargo Bank provided the senior mortgage — of which $51.5 million is slated to be packaged into a commercial mortgage-backed securities deal, according to a KBRA report and Trepp data. The CMBS pool, expected to total about $519 million, is set to close next month. 

    The loan, which expires in 2029, was used to pay off previous debt from Northwestern Mutual, according to KBRA. CalSTRS also put in about $960,000 to help pay off the loan and fund reserves for tenant improvements. 

    Brokers, investors and developers all say lenders are extremely picky right now when it comes to lending on office properties, given the prominence of remote work and tenants continuing to shrink space. 

    The lenders out there are handing out debt at lower loan-to-value ratios, requiring owners to front more equity. 

    On the Wilshire deal, Wells Fargo disclosed to KBRA that it gave out the loan at a 43 percent loan-to-value ratio. In 2019, the National Association of Realtors reported that about 70 percent of loans had loan-to-value ratios of 75 or 80 percent.

    As of this month, the office building was 63 percent leased, with average rents of about $60 per square foot a year — higher than West L.A.’s average asking rents of about $56 a foot in the third quarter. 

    The property’s largest tenant, Kinetic Content, has a lease expiring in 2026, but has a five-year renewal option. 

    In June, an entity linked to LaSalle Investment Management, which manages the building on behalf of CalSTRS, filed a lawsuit against Braunstein & Braunstein, claiming the law firm owed $920,000 in back rent at the building. 

    Cash flow at the property has risen steadily since 2021, when it took a hit, according to the KBRA report. 

    The building reported net cash flow of $7.9 million from January through October last year, up from $7.7 million for the entire 12 months of 2022. 

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    Isabella Farr

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