BWE Closes $90M Loan for LA Luxury Property

1133 Hope. Image courtesy of BWE

National multifamily mortgage banking company Bellwether Enterprise Real Estate Capital, LLC (BWE) has closed a $90 million permanent placement loan for the financing of 1133 Hope, a Los Angeles apartment community. The loan represents a long-term financing solution, replacing a maturing construction loan. According to Yardi Matrix, the owner of the building is Z&L Properties. 

Located at 1133 S. Hope St. in the heart of downtown, the rental property is an elevator-served, steel-frame, 28-story, 208-unit luxury apartment community completed in 2020. Included within the property is more than 5,000 square feet of retail space.

The mix of residences features studio, one-, two- and four-bedroom apartments. Residences offer soft-close kitchen drawers, digital locks, above-average ceiling heights, quartz countertops and private balconies and patios. Among the leading amenities of 1133 S. Hope is a concierge available 24-7.

Stephen Perricone and Thomas Mazlo, both senior vice presidents working in BWE’s Philadelphia office, originated the loan on behalf of the borrower.

Rate locking

“The property was new construction and in lease up,” Perricone told Multi-Housing News. “We needed to find a lender who would entertain rate locking and closing prior to stabilization (at) 95 percent leased. At the time, the property was in the mid-70s percent leased. The DTLA market was hit hard during COVID, and was just starting to rebound but leasing concessions were still significant, one to two months on 12-month leases. Gauging the trajectory of the market and where the economic rents would stabilize was challenging. A quick closing was required due to pending construction loan maturity.”

The insurance company lender offered a multifamily pre-stabilization program. That allowed the lender to rate lock and close with some temporary credit enhancement, Perricone explained. “The lender also owns multifamily in Southern California, and lent on several projects in DTLA, and therefore knew the strong locational attributes and dynamics and trajectory of the market,” he added. “The lender has a capital allocation they need to fill by year end, which dovetailed nicely with the borrower timing and construction loan maturity . . . Both parties were equally motivated to close quickly.”

Near dining and nightlife, 1133 Hope stands two blocks from the L.A. Live entertainment complex, Crypto.com Arena and the Los Angeles Convention Center. Available on-site parking gives residents access to the Harbor Freeway and Interstate 10.

Last month, a Naperville, Ill., senior community landed a $21 million refi from BWE.