Newmark secured the long-term loan for this historic L.A. community.
Prime Residential, owner of Los Angeles’ Park La Brea, the largest apartment community on the West Coast, has refinanced the historic multifamily property with a $947 million Freddie Mac loan that is expected to be securitized through its K-Deal program. The deal is possibly one of the largest multifamily finance transactions of 2023 and the largest single-asset financing since 2019.
The 10-year, fixed-rate loan was secured by Newmark Group for Prime Residential, a repeat borrower, to retire existing debt for the 4,249-unit rent-controlled apartment community. Prime Residential, a San Francisco-based owner and operator of more than 18,000 multifamily units on the West Coast, had received an $878 million loan from Freddie Mac in April 2015 that was also used to retire existing debt. Like the current refinancing, that loan was also expected to be securitized through Freddie Mac Multifamily’s K-Deal program. K-Deals are part of the company’s business strategy of transferring a portion of the risk of losses away from taxpayers to private investors who purchase the unguaranteed subordinate bonds.
The financing is the second-largest agency loan ever and is believed to be the largest single-asset financing ever executed by Freddie Mac. The transaction is also the fifth-largest single-asset U.S. multifamily loan of all time, Newmark Executive Vice Chairman Mitch Clarfield told Multi-Housing News.
Clarfield, along with Newmark Vice Chairman Ramsey Daya, Executive Managing Director Chris Moritz and Vice President Alex Newman lined up the new loan. Clarfield, in a prepared statement, said the team received interest from many different capital sources offering competitive terms, despite turbulent market conditions.
Newmark received interest from many different capital sources with competitive terms, despite market turbulence, according to Clarfield. “Life companies, CMBS and banks were all interested. The tightest spreads were offered by CMBS lenders.”
Clarfield said he was unsurprised at the level of interest. “Even in volatile times, lenders want to lend on the best assets, and Park La Brea is clearly one of the best assets that a lender could have in its portfolio.
With lending standards tightening, GSEs like Freddie Mac have been playing a crucial role in providing liquidity, especially for mission-rich and affordable housing. Clarfield noted that the loan includes the flexibility to construct a significant number of Accessory Dwelling Units on the property, which will help address the state’s housing and affordability crisis.
The financing is the second-largest agency loan ever and is believed to be the largest single-asset financing ever executed by Freddie Mac. The transaction is also the fifth-largest single-asset U.S. multifamily loan of all time, Newmark Executive Vice Chairman Mitch Clarfield told Multi-Housing News.
Clarfield, along with Newmark Vice Chairman Ramsey Daya, Executive Managing Director Chris Moritz and Vice President Alex Newman lined up the new loan. Clarfield, in a prepared statement, said the team received interest from many different capital sources offering competitive terms, despite turbulent market conditions.
Newmark received interest from many different capital sources with competitive terms, despite market turbulence, according to Clarfield. “Life companies, CMBS and banks were all interested. The tightest spreads were offered by CMBS lenders.”
Clarfield said he was unsurprised at the level of interest. “Even in volatile times, lenders want to lend on the best assets, and Park La Brea is clearly one of the best assets that a lender could have in its portfolio.
With lending standards tightening, GSEs like Freddie Mac have been playing a crucial role in providing liquidity, especially for mission-rich and affordable housing. Clarfield noted that the loan includes the flexibility to construct a significant number of Accessory Dwelling Units on the property, which will help address the state’s housing and affordability crisis.
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