CULVER CITY, CA-An affiliate of Los Angeles-based Hackman Capital has secured a new CMBS loan to refinance three buildings totaling 32,248 square feet that are 100% occupied by Westwood One Inc., one of the country's largest providers of network radio programming, in a deal that is described by Verona Capital Markets managing principal Eliav Dan as "yet another example of the continuing evolution of the recently resurgent CMBS market." Dan and VCM associate Michael Weiner arranged the $5 million financing for the Hackman Capital affiliate, which acquired the portfolio in an all-cash, sale-leaseback transaction in December, 2009.

The Westwood One facilities are adaptive re-use, creative office buildings that the company uses as office, recording and production studios. Century City, CA-based VCM arranged the non-recourse financing from a major Wall Street investment bank, which provided a 10-year fixed rate loan with a 30-year amortization period and a 5.99% coupon. The proceeds of the loan were used to repatriate equity to the sponsor and its investors.

According to Dan, VCM "mitigated the risk associated with a single, non-investment grade tenant by highlighting the superior sponsorship behind the transaction, including its track record of operational excellence across its portfolio and its extensive experience in the Culver City submarket." Weiner added that another area of concern for potential lenders was the specialty use nature of the buildings.

In addition to highlighting Westwood One’s longstanding occupancy of the buildings and the financial commitment of its majority equity stakeholder, local private equity firm the Gores Group, Dan pointed out that VCM assuaged the lender’s concern regarding a downside scenario by emphasizing the location of the project in reinvigorated downtown Culver City, the fungibility of the buildings, the loan amount relative to land value and the "go-dark" value of the buildings. Dan, who formerly was a loan originator for an investment bank, noted that while CMBS lenders remain cautious, they are open to financing properties like the Westwood One facilities if the deals can be structured to mitigate lender concerns.

Michael Hackman, founder and CEO of Hackman Capital, said that the transaction "is reflective of the vitality of the Culver City submarket." Said Hackman: "Culver City is a vibrant market—it is one of the Westside's most progressive and rapidly growing areas and is an established destination for creative businesses. We are expanding our footprint here for good reason."

Of the 13 properties Hackman Capital affiliates already own in Southern California, five are in Culver City. The three Westwood One studios are located in the Hayden-Higuera district at 8960 Washington (9,668 square feet), 8966 Washington Blvd.(14,780 square feet) and 8944 Lindblade St. (7,980 square feet).