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Tuesday, Oct 3, 2023

Redondo Beach Hotel Gets $38 Million Loan

The Portofino Hotel & Marina, a 161-room hotel in Redondo Beach, has received a $38 million loan.

The five-year, floating rate loan replaces a maturing loan on the property.

Sonnenblick-Eichner Co. arranged the interim first mortgage leasehold financing.

The Portofino Hotel & Marina has a full-service restaurant and lounge, lobby bar, outdoor pool, fitness center, a 181-slip marina, 19 apartments and meeting and event space.

“We were successful in getting the lender comfortable with the ramp-up of the property to pre-Covid levels as well as the short-term remaining on the ground lease,” Elliot Eichner, a principal of Sonnenblick-Eichner Co., said in a statement.

In a ground lease, different entities own the land and the building or improvements made to the land. This allows the land owner to get monthly rent without having to make upgrades. And when the lease, which is usually long-term, is up they get any improvements made to the land.

A building owner, meanwhile, gets a property in areas that are desirable and often hard to acquire, without having to pay for the land itself.

Ground leases are common in areas like Marina del Rey.
“While leasehold financing can present underwriting challenges, we were able to attract multiple institutional lenders who had an interest in providing this financing,” Patrick Brown, a principal of Sonnenblick-Eichner Co., said in a statement.

There’s been a flurry of loans announced for other properties in L.A.

Columbia Pacific Advisors recently provided a $27 million construction completion bridge loan to recapitalize the Hyatt Hotel Nue at 1525 N. Cahuenga Blvd. in Hollywood.

The hotel is owned by S3D Partners. Upon completion, it will have 64 guestrooms, a restaurant, a rooftop bar, a lounge and pool area and underground parking.

Sonnenblick-Eichner Co., meanwhile, arranged a $30 million refinancing for an office building in Manhattan Beach.

The property receiving the 10-year, interest-only loan is located at 1888 Rosecrans Ave.. It's a 78,540-square-foot building in Continental Park that is owned by El Segundo-based Continental Development Corp.

And a 122-unit multifamily building at 269 S. Mariposa Ave. in Koreatown received a $41.5 million mortgage loan. The floating-rate loan has an initial term of three years which can be extended for two additional years.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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