One of the West Coast's largest apartment property by units has secured a $947 million loan despite commercial real estate borrowers experiencing obstacles to getting financing in recent months.
San Francisco-based Prime Residential landed the financing for its 4,249-unit Park La Brea apartment complex at 6200 W. 3rd St. in Los Angeles, according to a statement by Newmark, which was involved in the financing deal. Publicly traded and government lender Freddie Mac financed the deal.
More details about the financing weren't known to CoStar News. Freddie Mac said it financed an $878 million loan for Prime Residential to retire existing debt in April 2015. A controlling interest in Park La Brea sold to Prime in 1995, according to the Los Angeles Times.
Park La Brea, which borrows its name from the adjacent paleontological research site La Brea Tar Pits, was built starting in the 1940s by MetLife and expanded due to a postwar housing shortage. The apartment site is the largest multifamily development west of the Mississippi River, according to the statement.
The gigantic property features 18 high-rise towers and 175 garden-style buildings on 144 acres. Roughly 10,000 residents live on site and have access to courtyards, trails, a movie theater, fitness centers and a dry cleaner.
The property may be expanded again as it has the flexibility to add accessory dwelling units, or ADUs, on site, Newmark Executive Vice Chairman Mitch Clarfield said in the statement. The property is roughly 95% leased, according to the statement.
'Comfort To Proceed'
“We received interest from many different capital sources on extremely competitive terms," Clarfield said in the statement. "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.”
That said, debt originations in the first quarter of 2023 were down 55% year over year, according to a Newmark report. Lending has been tightening due to rising interest rates and economic uncertainty, which has made it harder for real estate investors and developers to trade and build commercial properties.
The Mid-Wilshire apartment market, which includes Park La Brea, has a 5.1% vacancy rate, above the greater L.A. average of 4.7%, according to CoStar data. The market's average monthly rent is $2,679, above the greater L.A. average of $2,224.
Prime Residential owns more than 18,000 apartments and townhouses, according to its Linkedin.
For the Record
Newmark's Mitch Clarfield, Ramsey Daya, Chris Moritz and Alec Newman led the financing.