L.A-based multifamily investment company Monem Corp. had a busy December. Monem bought three multifamily properties during the month two in Koreatown and another in Venice for a total of about $5 million. Two of the buildings were in poor shape, which was attractive to Monem because the company focuses on acquiring distressed assets.
“Every year December is an interesting month. A lot of people who are in trouble need to do things in December,” said Danny Monempour, president of Monem, which owns about 30 apartment buildings in Los Angeles.
With the drastic downturn in the local real estate economy, Monempour expects to make many acquisitions this year.
“There are amazing opportunities coming and there will be a lot more,” he said.
In one of the Koreatown deals, Monem bought a 15-unit apartment building at 843 S. Ardmore Ave. for $2.25 million. The seller was Ardmore Investors LLC, a local group. The 1989 building has six two-bedroom and nine one-bedroom apartments. Monem has already started a $225,000 renovation and will add hardwood floors, stainless-steel kitchen appliances and new door locks, among other features. Monempour said 14 of the 15 units were occupied at the time of sale.
In the other Koreatown deal, Monem and an unnamed partner bought a 14-unit apartment property at 737 S. Burlington Ave. for about $950,000. The deal was with 737 S. Burlington LLC, a family of real estate investors.
In the final transaction, Monem picked up a nondistressed, six-unit apartment property in Venice for $1.79 million. The seller was the Hinton Family Trust. The building at 14 Ozone Ave. in Venice has one studio, two one-bedroom units and three two-story loft units. Monem will spend about $15,000 per unit in upgrades.
Dan Baird of Bridgepointe Equity Partners represented both sides of the Ardmore deal. Josh Tomaszewski of JRM Properties represented Monem in the Burlington deal and the seller was represented by Chaya Goldenberg of Nelson Shelton & Associates. Judd Weiss of Weiss Investment represented both sides of the Ozone deal.
Loan Deal
L.A.-based Mesa West Capital LLC, a private real estate lender, has provided developer and investor Magellan Group Inc. with a $26.5 million loan so that Magellan could pay off a previous loan it took out with an unnamed investment bank.
L.A.-based industrial developer Magellan was able to pay off a $45 million loan on its 500,000-square-foot Grace Place property in the City of Commerce at a discount, or for “66 cents on the dollar,” according to Jeff Friedman, co-chief executive of Mesa West.
“The bank wanted to get the loan off the books before year’s end and approached Magellan and agreed on a $32 million price,” said Friedman, who added that another lender, Penwood Select Industrial Partners II LP, an investment fund, provided Magellan with $5.75 million in additional debt to complete the Dec. 15 transaction. The original loan was written near the top of the real estate market in 2007, before the crash froze the credit markets.
While this sort of deal is still relatively uncommon, Friedman believes that the transaction could be a harbinger of more discount payoff deals as banks look to get loans made at the height of the market off their books.
“The longer the illiquidity remains, the more stress there will be on sponsors,” Friedman said. “The more they are resigned to the fact that there is no elixir for all of this, the more they are going to say, ‘We are going to sell our debt at a discount.'”
The debt payoff loans were arranged by Brian Halpern and Ben Wagner of CB Richard Ellis Group Inc.’s Capital Markets division.
Brokerage Sale
Coldwell Banker Residential Brokerage in Greater Los Angeles, a unit of Parsippany, N.J.-based brokerage company NRT LLC, has purchased a boutique residential brokerage for an undisclosed price.
The deal is yet another sign that the residential brokerage market is contracting amid the drop-off in the residential market.
The Dec. 30 deal for the assets of Innovative Realtors Inc. gives Coldwell a stronger presence in Marina del Rey, said Betty Graham, president of Coldwell’s Los Angeles office.
“It’s hard right now, so it’s good for us because it does present opportunities,” said Graham. She had long courted the owners of Innovative, Steve Aguilar and wife Renee.
Coldwell plans to close a nearby office during the first quarter and move its brokers into the Innovative space at 124 W. Washington Blvd. in Marina del Rey. Later this year, Coldwell plans to open another office in Venice.
Coldwell will take on Innovative’s 42 brokers, Graham said.
She also said that the Aguilars will work as brokers in the office. They own the two-story Washington Boulevard building and Coldwell will pay them rent. The property is for sale, however.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
