PASADENA, Calif., April 13, 2020 – Marcus & Millichap (NYSE: MMI), financing subsidiary Marcus & Millichap Capital Corporation (MMCC), has arranged a $34.5 million construction loan for a 48-unit condominium development project in Pasadena, California.
“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 Stefen Chraghchian in MMCC’s Encino office. “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 Sharone Sabar, senior managing director capital markets, arranged the loan. “The structure of the deal was complex as the unsold units from Phase I were attached to the Phase II loan as collateral,” continued Chraghchian. “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% adjustable interest rate and 40% loan-to-value. “Being in the midst of the Covid-19 pandemic added an additional challenge,” added Sabar. “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 expected to be completed in 2021. It will include an amenity deck with a pool, hot tub, and outdoor entertainment area. The average unit size will be 1,243 square feet.
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With more than 2,000 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research and advisory services. Founded in 1971, the firm closed 9,726 transactions in 2019 with a value of $49.7 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors. To learn more, please visit: www.MarcusMillichap.com.