MF1 Capital Refis Massive L.A. Apartment Complex With $163M Loan Package
By Nick Trombola October 24, 2023 6:20 pm
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Fifteen Group has secured refinancing for one of Los Angeles’ largest apartment complexes.
The firm received $163 million across two loans from lender MF1 Capital to refinance the 1,175-unit complex known as Wyvernwood at 2901 East Olympic Boulevard in Boyle Heights. The complex, the first large-scale garden apartment ever built in L.A., is valued at $233 million, according to The Real Deal, which cited a report from ratings agency DBRS Morningstar.
MF1 securitized one of the loans into a collateralized loan obligation, or CLO, which totals approximately $895 million and has an average interest rate of 8.87 percent, according to TRD. The interest rates of the loans were not disclosed.
Miami-based Fifteen Group purchased the then-troubled complex in 1999. The former owner was forced to sell after city health officials found lead paint across the interiors and exteriors of the apartments. The 630-acre site opened in 1939.
The firm submitted plans in 2007 to redevelop the complex into a series of high-rise condos, effectively quadrupling the size of the property and eliminating much of the green space that defines it, with a price tag of $2 billion. Residents and city officials opposed the plans, however, and they were eventually rescinded in 2019.
In 2018, the firm secured $155 million in mortgage-backed securities financing for the property from UBS. That loan, which matured this year, refinanced $111.4 million in outstanding debt and allowed the sponsor to cash out $41.1 million in equity.
Finances of the complex appeared strong at the time, with yearly income averaging about $10 million, Commercial Observer reported at the time. Yet analysts from Fitch Ratings, who visited the site to rate the transaction, said the complex generally lacked landscaping and that deterioration was visible along the exterior of some of the buildings.
Fifteen Group could not be reached for comment.
Meanwhile, MF1 has provided several other high-dollar refinancing loans this year. The lender supplied a $165 million loan to refinance The Dorsey, a 619,000-square-foot mixed-use building in Miami in April, as well as a $69 million loan to refinance The Reserve, a 113-unit multifamily property in Harlem.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
