Dealmaker: Continental Partners Secures $14M for Apartment Communities
Continental Partners, Los Angeles, secured $13.8 million in financing for three southern California apartment properties encompassing 46,800 square feet.
J.M. Grimaldi, Continental Partners Executive Vice President, made the arrangements with Associates Carl Riggins and Brian Asheghian.
“While multifamily continues to be one of the most in-demand product types in southern California, as the cycle matures, many lenders have become more conservative in their underwriting, especially in refinancing new construction,” Grimaldi said. He noted most lenders require collection history records going back at least 90 days before they will offer any non-recourse financing options.
The deals included $5 million in cash-out construction refinancing for an 18,400-square-foot Class A property in South Los Angeles. Asheghian said the borrower sought a cash-out option to fund potential acquisitions of additional multifamily opportunities in the region. “Since the asset was newly built and the requested loan amount could not be met because of loan-to-cost restrictions, most lenders were requiring recourse structured loans,” he said. “We were able to secure a lender that was comfortable using the current market value of the land based on the detailed market reports we provided, which increased the value of the property and in-turn the loan proceeds.”
The 10-year fixed-rate loan sized to 55 percent of value priced at 4.5 percent.
The Continental Partners team also secured $3.5 million in cash-out refinancing for an East Hollywood multifamily property. The borrower had just completed construction and had not yet received the certificate of occupancy when they started searching for refinancing, Asheghian said.
“Due to the inflationary environment, the borrower was interested in securing more competitive refinancing for their multifamily asset as quickly as possible,” Asheghian said. “Lenders were hesitant to offer non-recourse financing without any secured pre-leases. We identified a lender willing to lock in the non-recourse rate for 90 days, giving the borrower time to receive their certificate of occupancy and lease 95 percent of the property.”
The five-year non-recourse fixed-rate loan priced at 4.56 percent.
Continental Partners also secured $5.3 million in cash-out refinancing for Rancho Coronado Condos, a 28,500-square-foot Class B+ community in Imperial Beach, Calif. Riggins said the borrower asked for financing with a cash-out component as well as an increased loan amount. “We were able to secure a larger loan amount as well as a $1 million cash-out component,” he said. “By addressing lender concerns head-on and highlighting the 95-percent occupancy, we were able to identity a lender comfortable with the borrower’s requirements.”
The five-year loan priced at 4.67 percent.
