Finance  ·  CMBS

Fifteen Group Seals $155M CMBS Loan From UBS for Wyvernwood Complex in LA


Mark Sanders, co-founder and principal of Miami-based Fifteen Group, has secured $155 million in mortgage-backed securities financing for his Wyvernwood Apartments multifamily complex in Los Angeles, according to rating agency documents.

Ackman-Ziff negotiated the five-year, interest-only UBS loan, which is split into two senior notes and two mezzanine portions.

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The Swiss bank appraised the garden-apartment development at $205 million, yielding a conservative loan-to-value ratio of 38 percent. The property’s current income is good for a debt-service coverage ratio of 3.55.

Fifteen Group will pay a fixed interest rate of 3.67 percent until the loan matures in 2023.

The development, at 2901 East Olympic Boulevard in the Downtown L.A. neighborhood of Boyle Heights, will secure the largest loan in the forthcoming UBS 2018-C12 CMBS deal, issued by UBS. The loan refinances $111.4 million in outstanding debt (previously sold into the JPMCC 2014-C23 trust) and will allow the sponsor to cash out $41.1 million in equity.

The 630-acre Wyvernwood Apartments site, near the interchange of Interstate 5 and Interstate 10, features 1,175 units that were begun in 1939 and last renovated in 2000. Occupancy stood near 98 percent at closing time, and hasn’t dipped below 95 percent over the last two decades, according to data from Fitch Ratings, which provided credit ratings for the CMBS deal. Tenancy is exceptionally stable for a multifamily property, with average residents staying for nearly 14 years. Almost a third of the current cohort has lived at Wyvernwood since the late 1990s.

Finances at the complex appear strong, with its yearly income averaging about $10 million. Capital expenses supported strong net cash flows, with the owners spending just $320 per unit on the building each year. But according to the Fitch analysts who visited the site to rate the transaction, that economical approach showed in the complex’s general lack of landscaping and deterioration visible along the outside of some of the complex’s residential buildings.

Average rent at Wyvernwood is $1,184, well below the neighborhood average of $1,436. But newer tenants have signed leases for more than $1,500 per month over the last year or two, according to Fitch.

Sanders and officials at UBS did not immediately respond to inquiries.