After almost three years in escrow, Meta Housing Corp. has finally closed on a 152,000-square-foot office building in Chinatown it plans to convert into senior housing.
The West L.A. for-profit affordable housing developer bought the building, at 808 N. Spring St. near Alameda Street, for $9 million last week from Kor Group, a Beverly Hills residential and hospitality property developer and manager.
“It is a catalyst for revitalization of that area of Chinatown,” said Tim Soule, senior project manager for Meta. “We are taking an eyesore away from the community.”
The nine-story building, only a block from the Metro Gold Line, is vacant and already zoned for apartments.
In fact, Kor, which developed the Pegasus Lofts in downtown Los Angeles, bought the property for $9.2 million in 2005 with plans to build a luxury condo complex. The company demolished the interior and completed a $1 million lead and asbestos abatement. But when it failed to secure long-term parking nearby and the economy began to turn, Kor abandoned the plan and listed the property in 2008.
Meta entered escrow on the property nearly immediately, but took more than two years to secure funding as the economy grew bleak. In the process, Kor defaulted on its loan on the property.
The new 123-unit project, known as Chinatown Metro Apartments, is being financed by a number of entities including a private lender, and state and local sources such as the city of Los Angeles Housing Department’s Neighborhood Stabilization Program. The development also will receive tax breaks.
Meta plans to begin renovations at the end of year and to open the building in early 2013.
The developer has built dozens of affordable housing complexes across Southern California. Among the most notable are downtown L.A.’s 80-unit Adams & Central Mixed-Use Development, which won the National Association of Home Builders’ best affordable apartment community award last year.
Albert Shilton, a Charles Dunn Co. senior managing director in Century City, represented Meta. Kor represented itself in-house.
Great Deal
A local family got such a good deal on a 29-unit apartment building without rent control in Sherman Oaks that it had barely closed escrow before offers for the property began rolling in.
The family’s Lever Apartments LP, which owns five apartment complexes in Los Angeles, bought the Kester House, at 5421 Kester Ave., for $5.45 million this month from an investor partnership that owns more than two dozen local commercial and multifamily properties.
Lever put down $1.45 million in cash after refinancing a 39-unit building owned in Encino and securing a loan for the balance. Within days of closing, Lever received several offers of more than $5.8 million, but the family has no intention of selling anytime soon.
“(They are) planning on holding on to the property,” said Paul Kenworthy, senior managing director with Charles Dunn, who represented the buyer. The deal, at about $220 per square foot, closed at market rate.
The buyer has already raised rents by 10 percent, bringing monthly rates to $1,100 to $1,800 per unit. The building has one-, two- and three-bedroom unit, as well as a Jacuzzi, a barbecue area and parking.
The sellers, Moorpark Dart LLC and BH Vineland, represented themselves in-house.
Fund Raise
West L.A. private-equity firm Astrum Investment Management has launched its first real estate investment fund, which will focus on sale-and-lease-back deals of midmarket corporate buildings in the L.A. metro area.
AIM plans to raise up to $110 million in equity capital and debt, and is targeting a 15 percent or more return on investment. The fund seeks to capitalize on owner operators that bought their buildings at the height of the market and are spending more than desired on their mortgage and building expenses, such as taxes, insurance and utilities.
The company plans to buy about 10 to 15 properties in the $6 million-$12 million range. It is targeting commercial buildings with good cash flow, little lease-up risk and an opportunity for capital appreciation.
Managing Director John Hartman said he hopes the fund, slated to close at the end of the year, will help his company establish a reputation. Astrum opened shop in Los Angeles only two years ago. If the fund is successful, plans are to launch several more.
Staff reporter Jacquelyn Ryan can be reached at [email protected] or (323) 549-5225, ext. 228.
