Principal Lends $34M on North Hollywood Apartments
The development spans 151,210 square feet in the only submarket that recorded a decline in vacancy in the San Fernando Valley.
By Greg Cornfield October 4, 2019 4:42 pm
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Principal Life Insurance Company has provided $34 million to refinance a newly-constructed multifamily development, The Ivy at NoHo, with 144 units in Los Angeles’ North Hollywood neighborhood in the San Fernando Valley, Commercial Observer has learned.
The 20-year, fixed-rate permanent loan will refinance the existing construction loan on the property. It carries an interest rate of 3.57 percent, with a 30-year amortization and a loan-to-cost of 85 percent, according to Brian Asheghian, director at Continental Partners, who secured the financing.
The five-story development, at 11011 Otsego Street, is owned by an entity tied to Stephen Samuel, who is the head of Evolve Realty and Development Corp. The 151,210-square-foot property is fully leased, Asheghian said.
Property records show the owner purchased the land near the intersection of Vineland Avenue and Magnolia Boulevard for $1.2 million from the Santandelo family trust in 2015.
Asheghian said many lenders balked at the large number of units recently completed or under construction in North Hollywood. He noted that the submarket was the only area in the San Fernando Valley that recorded a decline in multifamily vacancy rates this year, according to Marcus & Millichap’s recent report.
Principal Life Insurance Company declined to comment.
Asheghian told the Commercial Observer that North Hollywood’s multifamily market is becoming “saturated at this point,” but he doesn’t expect developers to slow down with more projects on the way.
Other multifamily properties are already set to rise in the immediate area. According to media reports, Strategic Legacy Investment Group is planning to build a six-story, 84-unit apartment on Burbank Boulevard and Abbey Road Inc. wants to build a 103-unit complex on North Clybourn Avenue. Investor Alan Kleinman is set to build a 119-unit project on Lankershim Boulevard.
Evolve Realty and Development Corp. is based in Baldwin Hills, which is east of Los Angeles. Principal Life Insurance Company is based in Des Moines, Iowa.
