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Friday, May 27, 2022

Loan Enables Purchase of Multifamily Portfolio

Mission Viejo-based Laguna Point Properties has received nearly $329 million in acquisition financing for a five-property multifamily housing portfolio in downtown Los Angeles.
Laguna Point borrowed the money for a portfolio with 1,037 units. The portfolio consists of the 184-unit SB Lofts at 548 S. Spring St., the 214-unit SB Main at 111 W. 7th St., the 198-unit SB Manhattan at 215 W. 6th St., the 178-unit SB Spring at 650 S. Spring St. and the 263-unit SB Tower at 600 S. Spring St.

“This transaction provides Laguna Point with an opportunistic scenario through which the company can re-enter the Los Angeles market,” Garrett LaBar, Laguna Point’s director of acquisitions and dispositions, said in a statement. “Laguna Point believes that the timing could not be better, given the recent gains in occupancy and rent momentum in downtown L.A. With employees returning to work in the area in large numbers, the portfolio is well-positioned to benefit from the increasing demand for rental housing.”

MF1 Capital provided the three-year, floating-rate acquisition loan with two 12-month extension options.
Jones Lang LaSalle Inc.’s Charles Halladay, Jamie Kline and Charlie Vorsheck represented the borrower.

“Downtown L.A. has seen a significant rebound in rent fundamentals,” Halladay said in a statement. “MF1 Capital, JLL and Laguna Point found an incredible opportunity to partner together and take advantage of this positive momentum in the urban core.”

In the fourth quarter, the apartment occupancy rate in downtown was 93.5%, up from 86% the previous year, according to data from the Downtown Center Business Improvement District.
The average effective rent per unit during the quarter was $2,759, up from $2,363 the year prior and $2,686 the year before that, before pandemic-related shutdowns, according to DCBID data.

The downtown office market, like many others in L.A., has had some difficulties during the pandemic. During the fourth quarter, the market had a vacancy rate of 21.2%, up from 18.3% the previous year, according to data from JLL. Last year, the market had nearly 700,000 square feet of negative net absorption.
Still, asking rates remained steady quarter-over-quarter at $3.83 a square foot, according to JLL data.

Paola Mendez
Paola Mendez
Paola Mendez graduated from Los Angeles Valley College, then transferred to University of California, and now serves as a Receptionist and Office Assistant to the Los Angeles Business Journal. Paola wears many hats in different departments and is trilingual in English, Spanish and French.

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