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HOLLYWOOD-The developers of a 54-unit condominium project called the Hollywood Condominium have landed a $27.4-million loan to take out their construction financing and pay off several investors despite credit market turmoil that made the deal “very challenging,” according to Marcus & Millichap Capital Corp. Daniel Litman, a senior director in the West Los Angeles office of Marcus & Millichap Capital Corp., tells GlobeSt.com that MMCC took the deal to market in the midst of some of the greatest turmoil in the capital markets and ultimately found a commercial bank to fund the refinancing.

Litman and Michael Derk, a senior director in the Long Beach office of MMCC, arranged the financing package, which is a 12-month adjustable-rate loan at three-fourths of a percentage point over prime, with a six-month extension, at a loan-to-value ratio of 61%. The 54-unit complex, built from the ground up, is at 6735 Yucca St. and is a project of Metro Modern Developers of Woodland Hills.

The transaction occurred “during the unraveling of the credit markets” at a time when “Most lenders wouldn’t consider the loan,” Litman says. He tells GlobeSt.com that several CMBS lenders were in the mix when MMCC first began seeking financing for the deal, but the Wall Street sources quickly disappeared because of the capital markets turmoil.

Among the factors that worked in favor of the deal, Litman explains, is that the condominium market is faring relatively well in the pocket of Hollywood where the Hollywood Condominium is located and that the project is a brand-new, ground-up building. He points out that the developers only recently received a certificate of occupancy and have sold a number of the units, including three recent sales that involved all-cash buyers.

“The Hollywood submarket has not seen a new ground-up development project of this caliber in more than 40 years,” Litman says. Until now, condominium developments in the neighborhood have been conversion projects. In addition, Litman notes, “We were able to get the loan-to-value to a level [61%] that helped to make the lender more comfortable with the deal.”

The Hollywood Condominium site is within walking distance of the Hollywood & Highland retail and entertainment complex as well as the Red Line subway station. It was designed by Stephen Kanner of Los Angeles-based Kanner Architects and sits on a site that was occupied by a restaurant that has been shuttered for some time before Metro Modern acquired the property and built the condominium project.

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