Newmark Group, Inc. (Newmark), a leading adviser and service provider to large institutional investors, global corporations, and other owners and occupiers of commercial real estate announces it has secured a $947 million loan for Los Angeles’ historic Park La Brea, the largest apartment community on the West Coast. Newmark sourced financing on behalf of repeat borrower Prime Residential (Prime) to retire existing debt. Freddie Mac expects to securitize the loan through its K-Deal program.
Newmark Executive Vice Chairman Mitch Clarfield, Vice Chairman Ramsey Daya, Executive Managing Director Chris Moritz and Vice President Alec Newman led the financing.
The 4,249-unit property is rent-controlled and includes 18 high-rise towers and 175 garden-style buildings spread over 144 acres. Approximately 10,000 residents live in the community, which resembles a small city with 24-hour security patrol, landscaped courtyards, fitness trails, a Wi-Fi café, movie theater, dry cleaner, electric car charging and fitness centers.
“Park La Brea, the largest housing community west of the Mississippi, is an iconic Los Angeles asset. This was a historic financing that contains a variety of custom features, including the flexibility to construct a significant number of Accessory Dwelling Units (ADUs) on the property, which will contribute towards addressing the state’s housing and affordability crisis” Clarfield stated. “We received interest from many different capital sources on extremely competitive terms. Ultimately, the surety of close and the history of collaboration between Prime, Freddie Mac and Newmark gave Prime the comfort to proceed in turbulent times and get the 10-year fixed rate loan across the finish line.”
“By continuing to support financing for Park La Brea, we are ensuring that many Los Angeles families have a safe, affordable place to live in this historic community,” said Steve Lineberger, Vice President Freddie Mac Multifamily Production and Sales. “Working with two great partners in both Newmark and Prime Residential, we are pleased to continue to help support workforce housing via this vital multifamily community that has been home to so many since the 1940s. We look forward to continuing to support liquidity, stability and affordability to the multifamily market through these types of transactions across the country.”
“With the GSEs laser focus on high quality affordable housing, we were honored to have worked with Prime and to partner with Freddie Mac to close this landmark transaction,” said Sharon Karrafa, Vice Chairman, Co-Head of Production of Newmark’s Multifamily Capital Markets division.
Park La Brea was originally developed by MetLife between 1941 and 1950 and has been owned and managed by Prime Residential since 1995. The 95.5-percent-occupied complex is located at 6200 West Third Street, about seven miles west of downtown Los Angeles near the Miracle Mile district.
Overall, debt originations continued to decelerate in the first quarter of 2023 according to Newmark’s 1Q23 U.S. Multifamily Capital Markets Report. Newmark Research cites that government-sponsored enterprises provide a buffer against the cyclical lending conditions. Given the tightening lending standards by banks and other lender types, GSEs play a crucial role in providing liquidity, especially for mission-rich and affordable housing.