$20M Funds Barn Lofts Condo Project

LOS ANGELES-The Los Angeles-based Borman Group has landed a $19.6 million construction loan from a San Francisco-based bank to finance the 39-unit Barn Lofts condominium project, according to Highland Realty Capital. Highland reports that the loan will provide 75% loan-to-cost financing for the project, which will convert a former sugar warehouse at 940 E. Second St. into live/work lofts.

Mike Guterman, a Highland principal, points out that obtaining construction financing for attached residential projects "has been very difficult over the past few months." However, Guterman says, Highland was able to get the San Francisco-based bank "comfortable with the pricing of other projects in the market and their relative exposure on a price per square foot basis."

Guterman tells GlobeSt.com that financing deals for smaller projects like the 39-unit Barn Lofts stand a better chance of getting done because "absorption is manageable," in contrast with larger projects. Guterman points out that the lender stood by its 90-day commitment to fund the loan, which was originally approved at the end of July.

The Barn Lofts project will likely begin sales in the summer of next year and is expected to be completed in the fall. About 75% of the units will be in the size range of 1,200 sf to 1,250 sf, with the remainder 2,000 sf or larger.

The Barn Lofts will feature units of two bedrooms plus two and a half baths each, with 30-foot ceilings, a private roof deck and a minimum of one interior parking space. Besides the interior parking that will afford direct access to the units, the project will feature additional on-site parking, Guterman notes.

The Barn Lofts building was originally built in 1906 as a warehouse for Spreckels Bros. Sugar Co. It is a distinctly long, narrow, brick and steel A-frame structure with a total sellable area of 57,703 sf. The property is situated at the eastern edge of Downtown and within walking distance of many of the city's cultural amenities.