BEVERLY HILLS, CA-A joint venture of locally based Kennedy Wilson and New York City's LeFrak Organization has refinanced a three-property multifamily portfolio with a $71.2 million loan at a 4.39% interest rate. The refinancing is part of a round of multifamily-related activities lately at Beverly Hills-based Kennedy Wilson, which also recently launched its third major high-rise condominium project in Los Angeles’ Koreatown, where the company’s business activity in the area now totals approximately $400 million.

The new debt for the three multifamily properties is a 10-year loan at fixed-rate financing that represents a rate reduction that "will allow the venture to materially lower the leverage on the portfolio, reducing interest expense by $1.5 million a year and thereby increasing income and cash flow,” commented Robert Hart, president and CEO of Kennedy Wilson Multifamily Management Group.

The new financing was arranged by a CB Richard Ellis Capital Markets team including senior vice president Brian Eisendrath and Justin Arquilla in the company's Beverly Hills office, along with executive vice president Troy Tegeler in CBRE's Newport Beach office, who arranged the loan through its Fannie Mae DUS lending program. Eisendrath commented that CBRE "was able to capitalize on the strong sponsorship of the KW-LeFrak venture and secure extremely favorable fixed-rate debt, creating additional cash flow to the partnership.”

The refinanced properties are located in California and Oregon. The Kennedy Wilson-LeFrak joint venture holds over 3,000 apartment units in California, Oregon and Washington. In addition to these units, Kennedy Wilson and its partners have acquired an additional 4,000 units this year.

In Koreatown, Kennedy Wilson’s deals include Chadwick Apartments, a 687-unit apartment building; the Mercury, a 149-unit condominium tower; the Summit, a 76-unit condominium tower; and Solair, a 186-unit condominium tower for which Kennedy Wilson was hired as the asset manager by ST Residential. Kennedy Wilson has hired Park & Associates to sell the 164 units that ST Residential took title to in early July of this year.

The ownership of recently opened Solair includes Starwood Capital, TPG Capital, WLR LeFrak, Perry Capital and the FDIC, owns a multibillion dollar portfolio of luxury high rise condominium projects and loans across the country. Stuart Cramer, president of Kennedy Wilson Residential Investment Group, describes Solair as "one of the two or three premier high-rise condominium buildings in Southern California."

Solair is the first project that ST Residential and Kennedy Wilson have collaborated on. The condo tower includes 40,000 square feet of retail space, the leasing of which is being handled by Kennedy Wilson Properties Group. Lee Shapiro, senior managing director of the division, described the project as commercial space that was “specifically built as transit-oriented, with MTA on property.

Kennedy Wilson chairman and CEO William McMorrow commented on the company's $400 million of activity in Koreatown: “We have seen tremendous growth in the submarket of Koreatown." Just in the first half of this year, McMorrow pointed out, almost half a million South Koreans have entered the US, and Los Angeles is home to the largest Korean community outside of Seoul.