Meridian Capital Group, America’s most active dealmaker, arranged $39.6 million in acquisition and adaptive re-use financing for a mixed-use property in Los Angeles, CA on behalf of Afton Properties.
The five year loan, provided by a mortgage REIT, features two one-year extension options and full-term interest-only payments. This transaction was negotiated by Meridian Senior Managing Director, Seth Grossman, and Vice President, Sarah Kuebler, who are both based in the company’s Southern California offices.
Located at 612 South Broadway in the Broadway Theatre District of Downtown Los Angeles, the 83,100 square foot property was built in the 1920s to house the iconic Desmond’s department store. No expense was spared in the original development one of Los Angeles’ original department stores and the property structure, architecture and character are unparalleled. However, since Desmond’s shuttered all its locations decades ago, the property has been vacant other than minor retail tenants located on the ground floor. Plans for the adaptive re-use include an entire modernization of the asset and a building expansion, contemplating an added floor with a gourmet restaurant and a rooftop terrace and bar with stunning views of the Los Angeles skyline. When complete, the property will also feature contemporary ground floor retail, including high ceiling retail space below grade, and six floors of class-A coworking office space.
Downtown Los Angeles, and more specifically the Broadway Theatre District, has undergone a major resurgence in recent years, transforming into an urban center that is now considered one of the city’s top neighborhoods. 612 South Broadway is advantageously located adjacent to the highly anticipated Nike Air Jordan facility and is in close proximity to the recently opened Whole Foods, Aesop, BNKR, Acne Studios, Mykita, and Urban Outfitters
“The plan our client has to transform this decades-long vacant building into a class-A mixed-use project is not only exciting, but something wonderful for a submarket that has seen tremendous forward momentum during the past several years. Lender’s immediately saw and believed in the vision and value proposition, speaking to the experience and capability of ownership. We look forward to watching the transformation begin and have no doubt it will be a success,” stated Mr. Grossman.
Added Reuven Gradon, principal of Afton, “We could not be more excited to begin this project. The DTLA market has such strength and character, and the Broadway District in particular we feel is still in early stages with regards to new developments, capital inflows, job creation and continued improvement. Having spent the last year finalizing plans for the renovation, we are thrilled to now have a lending partner standing with us that shares our vision.
Founded in 1991, Meridian Capital Group is America’s most active dealmaker and one of the nation’s leading commercial real estate finance, investment sales and retail leasing advisors. In 2017, Meridian closed over 3,000 transactions across more than 200 unique lenders and sold nearly $1 billion in commercial property. Meridian represents many of the world’s leading real estate investors and developers and the company’s expansive platform has specialized practices for a broad array of property types including office, retail, multifamily, hotel, mixed-use, industrial, and healthcare and senior housing properties. Meridian is headquartered in New York City with offices in New Jersey, Maryland, Illinois, Ohio, Florida, and California.