LOS ANGELES-A note secured by an apartment complex in Santa Monica has sold for 80 cents on the dollar, and a note on a mixed-use project in San Pedro has sold for 32 cents on the dollar, according to principal Matt Ayer of Agoura Hills-based RcmaGroup. Ayer tells GlobeSt.com that in both cases the buyer of the note intends to gain control of the underlying collateral.
The property in Santa Monica is a 20-unit complex, and the note sold for what equated to a 5.5 gross rent multiplier on current rents, according to Ayer. He says that the buyer’s plan is to foreclose on the property, which was built in the 1970s and is 90% occupied. The property owner acquired the complex about four years ago, and the reason the note was on the market was that the Southern California-based bank has already said that it won’t refinance when the loan comes due next year, Ayer explains..
The mixed use project in San Pedro consists of multifamily units over about 6,500 square feet of retail developed by an owner who went bankrupt. The buyer of the note, which was held by a Southern California bank, plans to complete what the original developer began.
Ayer says that the two note sales are a sign of what will continue for some time to come. “We think this is the business model over the next three to five years,” he says, especially in light of the huge amount of commercial real estate debt that will be maturing over that time.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
