Quantum Capital Arranges $25M for LA Student Housing

City Park Apartments is near the University of Southern California and features 130 units and a subterranean parking garage.

Maker:0x4c,Date:2017-10-25,Ver:4,Lens:Kan03,Act:Lar01,E-YQuantum Capital Partners has secured $25 million in long-term, fixed rate debt to refinance a non-traditional student housing community called City Park Apartments in downtown Los Angeles. The 130-unit property is situated two blocks from the campus of the University of Southern California (USC).

Encompassing two four-story multifamily buildings at 1246 and 1247 W. 30th Street, City Park Apartments features a mix of two- and three-bedroom floor plans. Among the property’s on-site amenities are a subterranean parking garage and a combination fitness center and recreation room. City Park Apartments is a close-by alternative for USC students, even though the property is not operated as a traditional student housing community. The appeal is reflected in the 99 percent occupancy the property showed at time of financing.

The challenge in financing this property [was] defining the property in the eyes of the lender as student housing or multifamily,” Quantum Assistant Vice President Kevin Wong told MHN.

Given the proximity to the university, the apartment is marketed primarily to the student population and is mostly occupied by students. Because of this tenancy, [the] property had a high turnover rate in between school years and required tight operational management to release units as efficiently as possible.

New renters list

Quantum presented the property’s consistent operating history, which yielded full occupancy year after year, as well as the marketing strategy that allowed the operator to maintain an active list of new student renters. “We also highlighted the property’s close proximity to the university,” Wong said, noting its location within the USC 24-hour patrol response area enhances its appeal to students as a housing alternative. “This gave the lender confidence that the apartment will continue to perform well into the coming decades.”

The sponsor, Park City LLC, is a local investor and management company that has owned City Park Apartments since developing the property 27 years ago.

The company sought to refinance maturing debt with a long-term fixed-rate loan before interest rates increased, Wong said.

We were able to secure an insurance company loan with a 22-year term at a fixed rate of 3.77 percent. In addition, we were able to secure a 60-day upfront rate lock on application, which protected the sponsor from rising interest rates that increased close to 40 basis points from application.