ADC Secures Financing for West L.A. Multifamily Property
- May 17, 2012
Los Angeles—ADC Realty Group has obtained financing for site acquisition and construction of an apartment property in West Los Angeles on the current site of a rental car location. Upon completion, the property will include 95 apartment units, and will also count as transit-oriented development, since it will be three blocks from a planned LA Metro Line station that will be completed a short time after ADC’s project.
The area is seemingly ripe at the moment with plans for development with strong multifamily components. Across I-10 from the ADC project Trammell Crow is planning to redevelop the site of the former headquarters of the National Academy of Recording Arts and Sciences (the Grammies, that is) into 300 rental units plus retail.
The financing for the ADC project included about $11.1 million in joint venture and construction equity, according to Jonathan Lee, vice president of George Smith Partners, who was assisted in the transaction by analyst Shine Cheng. ADC hired CRE real estate investment banking firm George Smith Partners to place the deal with institutional equity investor.
Lee says that the equity partner liked the potential returns from the West LA location. Besides being near the new Metro station, the property will be marketable to nearby employees of tech and entertainment companies, which are heavily concentrated in this part of greater LA. “These companies have attracted sophisticated employees that raise both the expectation level of renters, as well as the price point for newly built units,” he notes.
Finding new construction rental comps in the area was difficult, Lee adds, since not many apartment properties have been built there in recent years. He calls that a “disadvantage” in the company’s efforts to find an equity partner, but says that it did ultimately demonstrate to investors the potential for the project in getting out of the ground first.