Acquisition Loan Helps Preserve Affordable Housing Property in LA
- Apr 25, 2016
Los Angeles—Mariman & Co. has obtained $38.2 million in acquisition financing for The Palms Apartments, a 338-unit affordable housing property. The apartments are in Rowland Heights, which is an unincorporated community in the San Gabriel Valley in Los Angeles County.
The loan is a Freddie Mac adjustable-rate mortgage serviced by JLL and features a seven-year term with three years of interest-only payments, followed by a 30-year amortization.
JLL International Director Tim Leonhard led the team that facilitated the deal. “The loan allowed the borrower to acquire the partnership interest rather than the fee simple interest, allowing the 10-year ownership chain to remain intact,” he explained.
“The structure, along with the flexible prepayment features, gave the borrower the ability to close very quickly while maintaining the option to re-syndicate the asset in the near future,” Leonhard added. The upshot of the deal is that it maintains the affordability of the property, an important consideration in a place like Southern California, where the demand is high and the supply low.
The loan features a 75 percent loan-to-value ratio and an interest rate of 2.815 percent. Mariman and Co. partnered with an institutional equity partner to fund the acquisition.