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| Courtyard at Culver Pointe, Silicon Beach, CA |
LOS ANGELES, CA (July 25,
2017) – Los Angeles-based property owner and operator Olive Hill Group has
obtained $41 million in fixed-rate refinancing for its Courtyard at Culver Pointe, a Class-A creative office campus in the
rapidly growing Culver City submarket of Silicon Beach.
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| Amit Tyagi |
The financing was arranged by Principal Andy Bratt and Vice President Amit Tyagi of Newmark Realty Capital,
Inc.
Headed by real estate
lawyers Michael Cho and Tim Lee,
Olive Hill Group acquired the office buildings for $65.6 million in May 2016
and recently launched a major redevelopment and rebranding of the property to
The Courtyard at Culver Pointe.
The redevelopment will
include upgraded seating areas throughout the courtyard, food truck loading
zones, a bocce ball court, and a new on-site gym facility, among others.
“Our investment thesis is
to add value to our creative office developments to ensure long-term value
upside,” says Tim Lee, Vice President of Corporate Development and Legal
Affairs. “As long-term holders with a fully-integrated, in-house property
development and management platform, we focus on driving revenue through
strategic leasing, renovations, hands-on management and a balanced curation of
tenants at each of our properties.
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| Tim Lee |
“During our first year of
ownership, we successfully attracted high-quality creative and technology
tenants at competitive rents, resulting in increased net operating income and
significant additional value.”
Since acquisition, Olive
Hill Group has added Ipsos Insight, a global market research and consulting
firm, and Omnia Media, a subsidiary of the Canadian company Blue Ant Media.
Existing tenants include DataScience Inc., Paychex and Shiseido Cosmetics, among
others.
“The Courtyard at Culver
Pointe’s prime location, strong occupancy, and quality tenant mix made this an
attractive property to finance,” explains Newmark’s Amit Tyagi. “The challenge,
however, was identifying a lender that understood the asset’s long-term
investment potential. Lenders typically look for consistency in historical
operating statements and had initial reservations with the recent ramp up in
net operating income.”
To combat this challenge,
Newmark Realty Capital, together with Olive Hill Group, leveraged their local
market expertise to prove that the current rent levels were sustainable and
on-par with market values. In addition, Newmark Realty Capital prepared a
pro-forma outlook and provided a number of rental comps to justify the projected
rents that the property would achieve upon completion of the extensive
renovations.
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| Beth Understahl |
By demonstrating the
upward trajectory of rent growth at the property, Olive Hill Group was also
able to structure an earn-out, allowing up to $10 million in additional funding
as certain net operating income thresholds are met.
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| Andy Bratt |
Lee confirms, “By
repositioning this property into a creative office campus with on-site
amenities that foster creativity and collaboration, we plan to attract
additional creative tenants, increase cash flow and net operating income, and
ultimately drive long-term value for this asset.
"This financing will position
us to be long-term holders of this property, and reflects our ongoing
commitment to the Courtyard at Culver Pointe.”
Olive Hill Group obtained
the $41 million loan through a life insurance company represented by Newmark
Realty Capital. The ten-year loan was structured with a seven-year,
interest-only period, followed by an amortization of 30 years.
Counsel for the borrower
were David Larsen and Beth Understahl
of Perkins Coie, LLP.
The property is located at
200-300 Corporate Pointe in Culver City, California.
For a complete copy of the company’s news release,
please contact:
Katie Kea / Lexi Astfalk
Brower, Miller & Cole
(949) 955-7940
