3650 REIT Arranges Loan for Los Angeles OZ Project
- Jun 19, 2020
An approximately $36 million bridge loan for the acquisition and redevelopment of Hollywood Backlot Homes has been arranged by 3650 REIT. The property is a 10-acre manufactured home community that serves the needs of Los Angeles renters seeking attainable alternatives within a housing market known for high cost and constrained demand.
Situated at 8250 Lankershim Blvd. in North Hollywood, Hollywood Backlot Homes is a detached multifamily rental community located in an Opportunity Zone. The redevelopment program will involve the sponsor designing and installing nearly 140 manufactured homes. Multifamily amenities consistent with Class A properties, such as a pool, will be included.
Renters who might otherwise seek an apartment can leverage the attainable price points to enjoy the larger space and sense of privacy afforded by a detached single-family home.
“Timing was one challenge that arose, as we only had 27 days from term sheet to closing to complete the transaction,” Jonathan Roth, 3650 REIT co-founder & managing partner, told Multi-Housing News. “The asset class was also a challenge, as manufactured homes are legally chattel, or personal property, although they can be converted into real property. Time was of the essence for this closing, and there were no extension options.”
The 3650 REIT team worked many long nights and weekends to push the deal to the finish line, Roth reported. “With regard to the asset class, we have a thorough understanding of manufactured homes as well as potential capital markets exits, which helped us get comfortable with the project,” he explained. “We also have an extremely strong sponsor with material, personal equity invested in the asset.”
Earlier this year, 3650 REIT originated a construction loan for a Tacoma, Wash., development.