A loan allows the purchase of a multi-family portfolio

Laguna Point Properties, based in Mission Viejo, has received nearly $329 million in acquisition financing for a portfolio of five multi-family homes in downtown Los Angeles.
Laguna Point borrowed the money for a portfolio of 1,037 units. The portfolio includes the 184 SB Lofts units at 548 S. Spring St., the 214 SB Main units at 111 W. 7th St., the 198 SB Manhattan units at 215 W. 6th St., the 178 SB Spring units at 650 S Spring St. and the 263-unit SB Tower at 600 S. Spring St.

“This transaction provides Laguna Point with an opportunistic scenario through which the company can re-enter the Los Angeles market,” Garrett LaBar, Laguna Point’s director of acquisitions and divestitures, said in a statement. “Laguna Point believes the timing couldn’t be better, given recent occupancy gains and rental dynamics in Downtown Los Angeles. With employees returning to work in the area in large numbers, the portfolio is well positioned to benefit from the growing demand for rental housing.”

MF1 Capital provided the three-year variable rate acquisition loan with two 12-month extension options.
Charles Halladay, Jamie Kline and Charlie Vorsheck of Jones Lang LaSalle Inc. represented the borrower.

“Downtown LA has seen a significant rebound in rental fundamentals,” Halladay said in a statement. “MF1 Capital, JLL and Laguna Point have found an incredible opportunity to partner and capitalize on this positive momentum in the urban core.”

In the fourth quarter, downtown apartment occupancy was 93.5%, down from 86% a year earlier, according to data from the Downtown Center Business Improvement District.
Average effective rent per unit during the quarter was $2,759, compared to $2,363 a year earlier and $2,686 a year earlier, before pandemic-related closings, according to DCBID data.

The downtown office market, like many others in Los Angeles, has struggled a bit during the pandemic. During the fourth quarter, the market had a vacancy rate of 21.2%, compared to 18.3% the previous year, according to data from JLL. Last year, the market had nearly 700,000 square feet of negative net absorption.
Still, asking rates were flat quarter-over-quarter at $3.83 per square foot, according to JLL data.

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