Dealmaker: Marcus & Millichap Arranges $62M
Marcus & Millichap Capital Corp., Calabasas, Calif., arranged a $34.5 million construction loan for a 48-unit condominium development project in Pasadena, Calif.
“After completing the first phase of the project with financing from another intermediary the developer asked us to create a more flexible and competitive financing option for the second phase,” said MMCC Loan Analyst Stefen Chraghchian. “Phase I involved converting the adjacent office tower to 57 condominium units and Phase II will add 48 units above a parking structure.”
Chraghchian and MMCC Senior Managing Director of Capital Markets Sharone Sabar arranged the loan for 245 S Los Robles Ave. “The structure of the deal was complex as the unsold units from Phase I were attached to the Phase II loan as collateral,” Chraghchian said. “We negotiated a payout structure for unit sales that would pay down the loan balance over time while allowing the developer to access more immediate sales proceeds.”
The 30-month loan was structured with a 5 percent adjustable interest rate and 40 percent loan-to-value ratio. “Being in the midst of the Covid-19 pandemic added an additional challenge,” Sabar said. “We emphasized the importance of timing to all parties and pushed to close as quickly as possible.”
The six-story, 62,075-gross-square-foot project is scheduled for completion next year. Units will average 1,243 square feet.
MMCC also closed the $27 million refinancing of a 137-bed seniors housing asset in Rancho Cordova, Calif. The 80,000-square-foot property delivered in 2016.
“We replaced the $17 million bridge financing we had placed on the property with this new 10-year fixed-rate permanent financing,” said MMCC First Vice President of Capital Markets Jeffery Shaddy, who arranged the financing.