South Korean Lender Provides $31M Mezz Loan on Witkoff Resi Project in Cali
South Korean investment firm Mirae Asset Daewoo has provided a $31 million mezzanine loan to Steven Witkoff’s The Witkoff Group to help facilitate the resumption of the firm’s planned luxury multifamily project in downtown Santa Monica, Calif., according to information from BridgeRock, which advised the lender on the deal.
The five-year, floating-rate mezzanine loan partly funds the remaining construction costs for 500 Broadway, a mid-rise mixed-use multifamily development in Santa Monica. It’s the only rental project in downtown Santa Monica to comprise over 200 units, according to BridgeRock.
“[A] couple of years ago, it was unheard of that Korean institutional capital would do construction loans. But as Korean institutional lenders mature in the U.S. real estate debt market, we are continuing to expand the types of loans we originate,” Wonsuk Bong, the head of investment banking at Mirae, said in a prepared statement, highlighting the increased interest in U.S. real estate subordinate debt from Korean investors that really began to catch the industry’s attention in 2017, as Commercial Observer had previously reported.
The total amount of the financing package, with the senior portion, could not immediately be ascertained. In 2017, The Real Deal reported that the price of the project is around $400 million.
The seven-story property — located just a couple blocks from the light rail Santa Monica Expo Line terminus — will boast 249 market-rate rental units across roughly 265,000 square feet of residential space, according to BridgeRock. There will be an additional 56,000 square feet reserved for retail or restaurant use as well as 524 below-grade parking spaces. The project is expected to be completed by 2021, according to information from architect Koning Eizenberg’s website.
According to Koning Eizenberg, the units will “flank upper-level courtyards to create nested communities,” while the units that face south and west will include movable screens, providing personalized control over natural lighting.
It will also sport a rooftop pool-deck, a fitness center and a full-service spa, according to BridgeRock.
The site had previously been home to fashion brand Fred Segal, which vacated in 2014. And Santa Monica’s City Council officially approved the plans for the design and development in 2016, according to a 2017 report from The Real Deal, after the design received public praise from locals in 2014.
BridgeRock has advised Mirae on a couple Witkoff projects recently, including helping finance his West Hollywood Edition luxury hotel and condo mixed-use project, the firm’s first foray into Los Angeles, earlier this year with a condo inventory and mezzanine loans; and also a mezzanine loan in 2018 on The Drew Las Vegas, a mixed-use luxury resort complex in the city that was named after CEO and Chairman Steven Witkoff’s late son Andrew. BridgeRock also worked with Witkoff in securing mezzanine debt on 20 Times Square, an Edition branded luxury hotel in Midtown Manhattan.
Officials at Mirae Asset Daewoo could not immediately be reached.