$36M Loan for Waterfront Community Gut Renovation
- Jan 13, 2015
Los Angeles—Far West Management has received a $36 million bridge-to-perm loan to renovate Villa Del Mar Apartment Homes, a 196-unit, four-building multifamily community with 209 boat slips, located on the Marina Del Rey-waterfront.
The $36.115 million perm-to-bridge non-recourse loan closed at a rate of 5.0 percent for a total of 10 years, at two years interest-only followed by a 25-year amortization. George Smith Partners arranged the loan for Far West Management with a lender that locked the rate on both the two-year bridge loan and the permanent loan at signing of the application.
“The appeal of the property is that it’s a laid back environment with lifestyle living along the docks; half the apartments have views of boats parked in the docks,” Steve Bram, George Smith’s principal and managing director, tells MHN. “Marina Del Ray is easily accessible to a lot of jobs and businesses, but you can also walk to the beach and have your boat there. It’s a really nice place to be.”
The money will be used for a complete gut renovation of Villa Del Mar Apartment Homes’ 196 units, as well as an interest reserve and some extension fees to the Country of Los Angeles.
Unit improvements will include new kitchens, new bathrooms, plus complete updating on electrical, plumbing and HVAC systems. Exterior improvements planned include new windows and doors. All public areas will be completely renovated as well, including the pool area, spa/sauna, clubhouse, rental office, tennis courts and basketball courts. In addition, the hardscape access, bathrooms and laundry facilities for the boat docks will be completely upgraded or replaced.
Currently, the units are larger than other newly constructed apartment communities in the area, ranging from 975-1,870 square feet. According to Bram, once renovated, the Villa Del Mar Apartment Homes will be uniquely positioned within the Marina Del Ray submarket, enabling the owner to charge premium rents based on the asset’s above-average unit sizes, stellar location and vast amenities.
“The loan allows Far West to vacate and renovate the buildings one floor at a time. Once a building is complete, Far West Management will lease that building at new premium rents, and subsequently take the next building off-line for its renovation,” Bram says. “This process will allow the client to continue to generate cash flow from existing rents throughout the renovation.”