September 22, 2020 Breaking News, Latest News, and Videos

Santa Monica Apartment Building Fetches Financing At $1.6 Million Per Unit:

Mortgage banking firm Quantum Capital Partners has secured $14.5 million in financing for a local investor operating as 4th Street, LLC and 5th Street, LLC. 

The new mortgage debt paid off a construction loan on a recently completed luxury apartment building in Santa Monica.

The modern three-story building features nine, three-bedroom, three-bath units ranging in size from 1,900 to 2,400 square feet. 

When completed in May, the building was appraised at $2.2 million per unit representing a 70 percent premium over the cost of construction, according to Quantum Managing Directors Mike Yim and Jonathan Hakakha who arranged the financing.

“Finding a lender willing to provide financing at 125 percent of total construction cost with only 66 percent occupancy and no seasoning is not an easy task,” said Yim. “Especially at a price per unit that is five times that of a typical apartment unit in Santa Monica. Despite the hurdles, we were able to secure the financing by sourcing aggressive capital and leveraging existing relationships. We identified an Asian-based lender and funded the loan within 30 days of application.”

The five-year variable rate loan was priced at the Wall Street Journal Prime Rate.

In a separate financing, Quantum arranged $5.6 million in debt to refinance a portfolio of single-family homes in Venice and Manhattan Beach.  

The investor, MSBV, LLC, has been operating the properties as executive short-term rentals catering to visiting professionals in the technology, new media and entertainment industries.

Each of the five homes benefit from a prime beachside location only blocks from the Venice Boardwalk and Manhattan Beach Pier.

“Both of these financings illustrate lenders’ appetite for well located income properties on the Westside,” added Hakakha. “The Westside, particularly in and around the beach communities is one of the strongest rental markets in the nation. A sponsor with a well-designed project close to the beach will attract interest from a variety of capital providers. The key is to customize a financing solution that will allow them to achieve their business plan.” 

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