The project, which sits on a 3.75-acre site at 668 S. Alameda St., is being developed by AvalonBay Communities Inc.
In addition to apartments, the property will also have roughly 60,000 square feet of commercial space.
The loan was arranged by Cushman & Wakefield’s Rob Rubano, an executive managing director at the brokerage, and came from a syndicate of banks led by Bank of America.
Rubano said completing the loan during the pandemic was a big win. “That was a good one to get done post-Covid. Not a lot of big construction loans have been done post-Covid around the country,” he said.
Large money center banks, Rubano added, “have been very, very inactive across the country. … They are really reserving capital in anticipation of future loan losses. They are not doing a lot.”
Rubano said he was starting to look at loans before the coronavirus arrived. The pandemic delayed the loan by three months, he added, “and it almost didn’t get done. Had we not started it pre-Covid, we would probably still be working on it.”
Many lenders are now looking at different terms than they were before the pandemic.
“Leverage is lower, spreads are wider a little bit,” Rubano said. “More banks want partial recourse. … It’s made it all a little bit more conservative.”
The AVA, Rubano said, is starting construction now and will be completed in 2022. The project is in an opportunity zone, according to Rubano.
The opportunity zone program is a federal tax incentive aimed at boosting development in distressed areas. Investors can defer capital gains taxes by investing capital gains in these areas.
The AVA isn’t the only project to receive financing this year.
In September, Jones Lang LaSalle Inc. announced that a multifamily portfolio on the Westside received a nearly $57 million loan.
The loan is a 10-year, 2.29% fixed-rate Fannie Mae loan for an undisclosed borrower. JLL Real Estate Capital is a Fannie Mae lender. The portfolio is made up of four properties across West Los Angeles and Beverly Hills.
Tauro Capital Advisors Inc. announced in August that it secured $50 million in loans for three developers for triple-net lease properties.
That same month, CBRE Group Inc. announced $26.8 million in financing for two office properties at 11925 Wilshire Blvd. in Brentwood and 2200 Pacific Coast Highway in Hermosa Beach, totaling nearly 71,000 square feet. CBRE arranged the financing for Vectra Management Group.
