Dealmaker: Sonnenblick-Eichner Closes $50M in California

Sonnenblick-Eichner Co., Beverly Hills, Calif., arranged $38 million in first-mortgage leasehold financing for Marina del Rey Hotel, a 164-room hotel on the water in Marina del Rey, Calif.

Patrick Brown, Principal with Sonnenblick-Eichner Co., said the loan did not require an earn-out provision despite the property’s limited operating history. The three-story hotel reopened in January 2015 after a $28 million renovation.

Sonnenblick-Eichner Co. Principal Elliot Eichner said the company a 10-year fixed-rate loan, sized to a 10 percent debt yield with the hotel being fully operational for less than 12 months. The loan provided for interest-only payments for the entire term.

Sonnenblick-Eichner Co. also arranged a $12.4 million fixed-rate loan to refinance a 63,500-square-foot Emeryville, Calif., office/flex building. An international investment bank funded the 10-year non-recourse loan at a sub-4.5 percent interest rate.

Private college Ex’Pression College of Digital Arts leases the entire property. “We were able to generate significant lender interest despite the complexities associated with a Tenant-in-Common structure,” said Sonnenblick-Eichner Co. Managing Director Tina Derderian. “Although a for-profit private college tenant presented some challenges, we were able to overcome lender concerns by illustrating the strength and depth of Emeryville’s creative office market.”

Sonnenblick-Eichner Co. Principal David Sonnenblick noted that real estate capital markets have “rebounded” since the beginning of the year when uncertainty caused credit spreads to widen significantly. “The recent flight to quality in the treasury markets and increasing demand for commercial mortgage-backed securities paper has resulted in both a reduction in the pricing indices and the tightening of credit spreads, resulting in an overall lower cost of capital for borrowers of commercial real estate loans,” Sonnenblick said.