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PLAYA DEL REY, CA-Palos Verdes Developers has secured a $25-million construction and permanent loan for its $28.5-million Del Rey Club apartment development in a move designed to restructure the financing to eliminate interest rate risk, a growing concern among developers in light of the prospect of continued interest rate hikes. Mike Guterman, an SVP with the Los Angeles office of Newport Beach-based Buchanan Capital Advisors, explains that the developer, a Buchanan client, had already financed the project with a traditional floating rate construction loan but wanted to switch to long-term, fixed rate financing for the property upon completion without incurring high forward commitment fees. Guterman and Kevin McKenzie, also of Buchanan’s Los Angeles office, arranged the financing in the form of a loan that was structured with an interest-only feature for the first year as construction is completed and then as the project is leased, the loan converts to a 30-year amortization. The new loan, Guterman explains, achieves the developer’s goal of securing permanent financing while interest rates remain near historic lows.The Del Rey Club is a 203-unit project under way at 8000 Manchester Ave., close to Marina del Rey, business centers, shopping and restaurants. The project will feature a mix of one-, two- and three-bedroom units with amenities including upgraded kitchens with granite counters and stainless steel appliances, laminate wood floors, 9-foot ceilings trimmed with crown molding, granite fireplaces, and individual security systems. The developer is targeting professionals and young families. Palos Verdes Developers is a development group that has built or remodeled more than 4,000 residential units throughout Central and Southern California.

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