NORTH HOLLYWOOD, CA-A joint venture of Beverly Hills-basedKennedy Wilson Multifamily has acquired the REO 180-unit NoHo 14Tower at 5445 Lankershim Blvd., financing it via a $40 millionmortgage with terms that would not have been possible six monthsago, according to the CBRE Capital Markets team that arranged thefinancing, the mortgage broker says. Senior vice president BrianEisendrath of the Beverly Hills office of CBRE Capital Marketstells GlobeSt.com that the break-even debt coverage ratio would nothave been possible just six months ago.

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"The debt-coverage ratio was really the key," Eisendrath says."The standard has been more like 1.25. In addition, he says,lenders probably would not have agreed to the two-yearinterest-free period of the five-year, 5% loan or the 68%leverage.

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"We achieved much higher proceeds than we as the mortgage brokeror our client anticipated," Eisendrath says. Eisendrath describesthe mortgage as bridge loan financing with stabilized loan terms."We essentially got stabilized loan terms for a bridge loan," hesays. The loan includes prepayment flexibility in the later years,with some penalties.

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The loan was also unusual in that the lender, one of a number oflife companies that competed for the deal, won in competitionagainst Fannie Mae and Freddie Mac. "It was more so theunstabilized nature of the asset that allowed the life companies toget more aggressive," Eisendrath explains. For example, Freddie andFannie both wanted a debt coverage of 1.25.

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Eisendrath was part of a CBRE Capital Markets team includingTroy Tegeler, Brian Halpern and Justin Arquilla who sourced thedebt through one of its correspondent life company relationships.He says that everyone involved in the deal was surprised with thelevel of proceeds.

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The Kennedy Wilson Multifamily JV acquired the property fromBank of America for approximately $59 million. The other partnersin the JV are Guardian Life Insurance Co., Real Estate CapitalPartners and Urban Partners LLC.

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NoHo 14 is a 14-story tower that was built in 2008 ascondominiums, but it is operating as apartments and is about 87%occupied. The project includes 11,000 square feet of retail space,which was empty at the time of closing.

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According to Eisendrath, the property offers upside to thebuyers on three fronts: filling the vacant units, burning offconcessions that the previous owners granted to renters and leasingthe retail.

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