LOS ANGELES, CA – October 1, 2013 – (RealEstateRama) — Commercial real estate investment banking firm George Smith Partners has successfully arranged $42.5 million in financing on behalf of its client, Upside Investments, for their $60 million acquisition of Crenshaw Village Apartments, a 669-unit multifamily community in Los Angeles, according to George Smith Partners’ Principal and Managing Director Steve Bram and Senior Vice President David Pascale.
The financing was provided from a George Smith Partner’s Correspondent FNMA lender and closed in six weeks from application, which was extremely fast considering the complicated financing structure, according to Bram.
“The complexity was the result of structuring five separate reverse exchanges,” he explained. “This structure involves allowing the sale of five other assets owned by Upside within six months, and transferring the tax basis to the subject property. Additionally the subject financing was split into two separate Fannie Mae loans, allowing for greater flexibility on future second fundings,” explained Bram.
“We have had the privilege of being Upside Investments’ exclusive financing source for the past ten years and understand this company’s deep expertise in the multifamily market,” said Bram. “Drawing from this knowledge, as well as our experience with FNMA, we were able to demonstrate the strength of Upside and this property to the lender.”
Bram noted that Crenshaw Village is a Class B/C asset in the working class neighborhood of Baldwin Hills, conveniently located between Downtown Los Angeles and Culver City. The property was built in 1948, and has undergone only minor renovations to date.
“The age and condition of the property provides significant room for value-add improvements by the buyer,” said Bram. “In addition, the surrounding area has seen a large amount of recent investment, including the new Light Rail, the newly announced Kaiser Hospital and the newly announced expansion of the Baldwin Hills Crenshaw Plaza.”
Gary Simons, President of Upside Investments, noted that these property and locational attributes were a major factor in the decision to acquire the asset.
“What attracted us to this investment was the physical property itself,” he said. “This is an older building, in good condition, with desirable, spacious floor plans.”
Simons also noted that Upside Investments recognizes the improvements in the surrounding area, and believes that the community is poised for ongoing growth.
He explained, “This was a large and important purchase for our company. As a small, family-owned investment company, we are always seeking strong investments in which we can add value.”
Simons remarked that George Smith Partners’ expertise was a key factor in the success of the deal.
“We have been working with George Smith Partners for over a decade, and we brought them the deal prior to making an offer in order to determine how attractive this investment might be to a lender such as Fannie Mae,” explained Simons. “The George Smith Partners team went above and beyond to get the go-ahead from Fannie Mae, allowing us to make an aggressive offer on the property and ultimately outbid our competitors.”
Simons noted that Upside Investments has not finalized its renovation plans for the property, but current plans include the addition of new appliances and laundry facilities, additional parking, as well as updates to the landscaping.
Crenshaw Village Apartments is located at 4220 Santa Rosalia Drive in the Baldwin Hills neighborhood of Los Angeles, and consists of 65 buildings on 40 separate parcels of land, totaling 25 acres. The property was built in 1948 and includes studio, one-, two- and three-bedroom floor plans.
Ron Harris, Executive Vice President of Investments at Institutional Property Advisors (IPA), along with IPA Associate Director Paul Darrow and IPA Associate Michael DiSimone represented both the buyer, Upside Investments, as well as the seller, a private investor in the acquisition.
“The sheer size and scope of this asset—652,750 gross square feet—make it the largest assemblage in the area,” says Harris. “The property’s tremendous potential is further enhanced by the ongoing public and private investment taking place in the immediate area. The number of offers written by a wide variety of private and institutional investors testifies to the amount of interest this property generated.”
About George Smith Partners
Now celebrating its 20th year in business, George Smith Partners is a leading national real estate investment banking firm that specializes in arranging financing for commercial and multifamily properties, including acquisition, construction, bridge and permanent loans, as well as mezzanine loans, highly leveraged participating loans and joint venture equity. They have arranged over $10 billion of financing in the last 10 years. Additional information about George Smith Partners is available at, www.GSPartners.com
Corynne Randel/ Jenn Quader
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