LOS ANGELES-Sixteenth Street Medical Center LP has closed on a$28.7 million construction loan from US Bank and will beginimmediately on the development of a three-story 50,000-square-footmedical building in Santa Monica, CA.

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The financing, which was negotiated on behalf of the borrower bylaw firm Greenberg Glusker, allows the development team, led byRandall Miller of the Nautilus Group Inc. to move forward on thebuild-to-suit for UCLA.

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As GlobeSt.com previously reported, UCLA signed a30-year lease for $147 million to occupy the entire building, whichwill be used as an outpatient surgery facility. At the time, SVPSteve Orchard of Century City-based George Smith Partners—the teamthat arranged the variable-rate short-term loan—told GlobeSt.comthat the developer had five solid offers to choose from prospectivelenders on his construction loan, three of them offering a firmcommitment on take-out financing.

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The loan starts at 5.25% and is keyed to LIBOR. The borrowerwill seek permanent financing once the building is completed,according to attorney Brian Kang of Los Angeles-based GreenbergGlusker.

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“As expected in this economic climate, lenders are taking a muchmore conservative underwriting approach when making real estateloans, especially construction loans,” says Kang. “However, USBank’s financing of this project shows that sophisticated lendersare still willing to make sizable lending commitments at reasonablerates and terms for quality projects that make economic sense.”

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The building is located at 1223 16th St. across the street fromthe Santa Monica-UCLA Medical Center and Orthopedic Hospital. TheMichael W. Folonis Architects-designed facility will be builtadhering to the US Green Building Council’s LEED standards and isexpected to obtain Gold certification upon completion.

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According to a source familiar with the deal, constructionstarts next month, but further information couldn’t be provided bydeadline.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.