Developer Secures $234M for LA Portfolio

G.H. Palmer has obtained cash-out refinancing for Medici and Orsini I, both luxury assets located downtown.

The Medici
The Medici

G.H. Palmer, a Southern California-based commercial real estate developer, has obtained more than $233.6 million in cash-out refinancing for a multifamily portfolio. The properties, the Medici and Orsini I, are in downtown Los Angeles.

The 632-unit Medici, completed by Palmer in 2002, features studio and one-, two-, and three-bedroom units with a 24-hour doorman, tanning salon, a private one-acre park, a jogging track, two tennis courts, a putting green, golf driving cages, and several pools and spas. The property is at 725 South Bixel St.

The Orsini I, at 505 North Figueroa St., was also developed in the early 2000s, and features studio amd one- and two-bedroom apartments with individual balconies or patios. The property offers yoga classes, a regulation size indoor basketball court, a movie theater and karaoke lounge, as well as a heated swimming pool and spa, private dry saunas and steam rooms, and a rooftop pool and spa overlooking skyline views.

The Refi Was Now, As Rates Are Going Up

The 10-year, non-recourse loan closed at 4.02 percent and sized at 60 percent of value. Gary M. Tenzer, principal and managing director of George Smith Partners, oversaw the refinancing on behalf of G.H. Palmer, arranging the loan as interest-only for its entire term.

“The sponsor had existing debt on the portfolio, with two years remaining and pre-payment penalties, which would typically discourage an early refinance,” Tenzer said. “However, the long- term savings of a 10-year fixed rate loan at today’s low interest rates outweighed the relatively minimal defeasance fees.”

Continued rate increases are a near-certainty, according to Tenzer, who expects to see rates increase 50 to 75 basis points in the next 12 to 24 months.