Freddie Mac to Buy Biggest Property on West Coast
- Apr 13, 2015
Freddie Mac Multifamily has agreed to buy, from HFF, an $878 million loan for the West Coast’s largest apartment community, the historic 4,245-unit Park La Brea in Los Angeles.
It will be the largest loan Freddie Mac has ever purchased for one apartment community, a Freddie Mac spokesperson told Commercial Property Executive. Repeat borrower Prime Residential will use the proceeds to retire existing debt.
After closing on the loan purchase at an undisclosed date soon, Freddie Mac plans to eventually securitize it through the K-Deal Multifamily Mortgage-Backed Securities program, the spokesperson added.
Park La Brea is at 6200 W. Third St., near the Miracle Mile district, and comprises 18 high-rise towers and 175 garden-style apartment buildings on 144 acres. It’s currently 96.4 percent leased.
The community has about 10,000 residents and features a 24-hour security patrol, courtyards, Wi-Fi cafes, fitness trails, a movie theater, hair salon, and business and fitness centers. The complex is rent-controlled, with about 10 percent of the units having below market-rate rents.
Built between 1944 and 1952, Park La Brea underwent renovations between 1995 and 2014. It was developed by the Metropolitan Life Insurance Co., in the era in which the insurer also built Parkmerced in San Francisco, Stuyvesant Town and Peter Cooper Village in Manhattan, Parkchester in The Bronx, and Parkfairfax in Alexandria, Va.
“Park La Brea is one of a kind. Aside from being the largest single property that we have ever financed, it is a storied asset … with a beautiful and timeless design,” David Brickman, EVP of Freddie Mac Multifamily, said in a release. “We are thrilled to have been able to work so closely with HFF and Prime Residential to very rapidly rate lock the loan and contribute to the preservation of this unique community.”
The HFF team was led by managing director Peter Smyslowski and included executive managing director Jody Thornton, senior managing directors Paul Brindley and Kevin MacKenzie, and managing director Charles Halladay.
“‘Dense, infill location’ is often a misnomer when describing real estate locations; however, in the case of Park La Brea, that description is very fitting since it’s positioned at the epicenter of Los Angeles’ explosive growth in cultural arts, entertainment, transportation and employment,” Smyslowski said in the release.
The theme in Los Angeles multi-family market right now is an onging surge of new deliveries, which nonetheless doesn’t seem to be depressing rents, according to a first-quarter report by Marcus & Millichap.
L.A. County is expected to add about 104,000 jobs this year, amounting to a 2.5 percent growth in headcounts, slightly more than last year. On the other side of the balance, about 10,000 units will be delivered this year, representing both an increase over last year (9,300 units) and “a multi-decade high,” according to the report.
Average vacancy in the Mid-Wilshire submarket is slated to remain steady at 3 percent, while M&M expects rents there to jump 7.9 percent to an average of $2,060.