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| Transaction Description: George Smith Partners arranged $11,115,000 in Joint Venture Equity to acquire a to-be-built 95 Unit multi-family development site in West Los Angeles. The client, a well-regarded Los Angeles based developer, was approached directly with an off-market opportunity in late 2011. The Developer had previously used internal funds to develop prior projects, but had engaged GSP to arrange institutional equity for this transit-oriented site. The Developer believed strongly in the site because of its excellent location. The parcel is situated three blocks from the LA Metro’s Expo Line stop at Olympic and Bundy, slated to open within 12 months of project completion. |
| Challenge: Despite being an off-market transaction, the project generated a tighter return on cost than most equity providers were looking to achieve on an un-trended basis. The project is located in very close proximity to the popular multifamily markets of Westwood, Brentwood and Santa Monica, but not in an area of recently constructed comparables. |
| Solution: GSP identified an equity partner that was knowledgeable of the prime West Los Angeles market and adjusted their return-on-cost criteria accordingly. GSP sourced comparable older projects within the development’s competitive set that demonstrated strong rental growth (6% in the last four months), and low vacancy (sub-5%). |
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