Tuesday, August 1, 2017

George Smith Partners Secures Acquisition Bridge Financing for Celebrity Condo Conversion in West Hollywood, CA

Patio del Moro Apartments, West Hollywood, CA

LOS ANGELES, CA (July 31, 2017) – Commercial real estate investment banking firm George Smith Partners has successfully secured bridge financing for the acquisition and condominium conversion of Patio del Moro, a seven-unit, courtyard-style apartment community in the West Hollywood submarket of Los Angeles.

 The financing was arranged by George Smith Partners Vice President Zachary Streit.

                Built in 1926 by renowned architects Arthur and Nina Zwebell, Patio del Moro is a historically-designated and architecturally-significant property that was once home to some of the most prominent celebrities in Hollywood history, including Charlie Chaplin, Paulette Goddard, Joan Fontaine, Humphrey Bogart, and Suzanne Pleshette.

Patio del Mar

            “This condo conversion is one of the first to take place in West Hollywood since the Recession, a sign that condos are making a comeback in Los Angeles,” explains Streit.

“The property’s historic significance, coupled with its irreplaceable urban-infill location, presented an attractive investment opportunity to capitalize on the demand for housing in West Hollywood. This deal reflects a renewed investor interest in for-sale residences, as well as strong lender appetite for condos in this market.”

Zachary Streit
            The sponsor, Brian Friedman investing through his family office Friedman Capital, is a private equity, venture capitalist, and commercial real estate investor developer who has been involved in the conversion and sale of more than 1,000 condominium units over the last 20 years.

He founded Friedman Capital in 2008, and is also the founder and managing partner of Foxhall Partners in Washington DC. Brian purchased this property with his older brother Jay, who has been a resident of Hollywood for decades.

Upon acquisition, the sponsor plans to renovate the property and apply for a Mills Act Tax Abatement, which provides economic incentives for the restoration and preservation of historic buildings by private owners.

            “Despite this asset’s prime location and unique investment potential, the challenge was getting lenders comfortable with the sponsor’s conversion strategy,” notes Streit. “Given the property’s historic landmark status and limited on-site parking, negotiating the condo mapping and release provisions would be difficult and would require an extensive set of approvals.”

Streit continues, “To address and resolve these concerns, we focused on demonstrating the sponsor’s proven track record of successful condo conversions and the pent-up demand for residences in West Hollywood. Our ability to source an attractive bridge loan to finance this deal is a testament to our market expertise, as well as the strength of our capital relationships.”

Paulette Goddard

Located just one block south of the Sunset Strip, in close proximity to a plethora of high-end restaurants, retailers, and music venues, Patio del Moro is situated in the heart of West Hollywood, a supply-constrained, high-demand Los Angeles submarket.

In recent years, West Hollywood has emerged as one of the most walkable, amenity-rich neighborhoods in Los Angeles, according to Streit. Notable attractions include entertainment venues such as the Roxy Theatre and The Troubadour; boutique hotels such as The Standard; The Pacific Design Center; film, television, and music production studios; and much more.

Brian Friedman
“West Hollywood is at the epicenter of the ongoing cultural revitalization in Los Angeles, and truly embodies the live/work/play lifestyle that today’s residents are demanding,” says Brian Friedman, Founder of Friedman Capital family office and Managing Partner of Foxhall Partners. “Patio del Moro’s proximity to nearby amenities, coupled with its historic character and old Hollywood charm, makes it well-positioned to cater to the demand for housing in this market.”

Designed in the Spanish Revival courtyard style with distinct Moorish features, Patio del Moro offers average unit sizes of 1,425 square feet, which are larger than average for this submarket, and includes a mix of mostly two- and three-bedroom units.

George Smith Partners secured the $4.5 million loan from a bank with a national lending platform. Sized to 65% of cost, the bridge loan is interest only and floats at prime plus 0.5%.

The property is located at 8225-8237 Fountain Avenue in West Hollywood, California.

For a complete copy of the company’s news release, please contact:

Miki (Conant) Akil / Katie Kea
Brower, Miller & Cole
(949) 955-7940

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