Sunset Boulevard Condos Secure $21M Loan
A joint venture obtained the financing for a new-construction condo project in the Silver Lake neighborhood of Los Angeles.
By D.C. Stribling, Contributing Editor
Barth Partners and Barry Leddy Developments have obtained a $21.6 million loan for a new-construction condo project at 3400 Sunset Boulevard in the Silver Lake neighborhood of Los Angeles. The property will include 35 for-sale units and 2,000 square feet of ground-floor retail space.
Per-square-foot prices for residential property in Silver Lake jumped 20 percent in the last year, according to Justin Barth, founder of Barth Partners, and the few for-sale condo units that have become available there have sold out quickly. That will make the new residences an attractive alternative for buyers, he asserted, though as yet the development’s price points are unreleased.
The project will feature such common amenities as a resort-style pool and spa, meditation garden, gym, conference rooms for residents who work from home, and a rooftop deck overlooking downtown LA and the Griffith Park Observatory. The location has a Walk Score of 89, which counts as “Very Walkable,” in that most errands can be done by foot.
The property also happens to be near one of Los Angeles’ picturesque staircases, located across Sunset Boulevard from Micheltorena Elementary School. It is decorated with hearts and rainbow colors.
Commercial real estate investment banking firm George Smith Partners secured the financing, which is a non-recourse construction loan with a completion guarantee from an off-shore investor. Sized to 80 percent of costs, the loan is priced at 10 percent for a two-year term, and includes two six-month options to extend.
“This property’s urban-infill location made it an attractive project to finance,” said George Smith managing director Jonathan Lee, who facilitated the financing. “The challenge, however, was that no new condo construction has been completed in Silver Lake recently, and as such, unit sale comps do not exist.”
So, the company provided several unit sale comps in Downtown Los Angeles and Hollywood. “The asset’s proximity to these markets enabled the lender’s credit group to accept the out-of-submarket sale comps in its valuation,” Lee said.