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Orsini II The 566-unit property is located at the corner of Figueroa Street and Cesar Chavez Avenue.

LOS ANGELES—The owner of the Orsini II, a 566-unit class-A multifamily property in Downtown Los Angeles, has secured a $115 million loan to refinance the property. The borrower was able to secure the funds with relative ease, considering we have seen a tightening in the debt markets this year, through an undisclosed lender, thanks to the high quality and location of the asset. While this specific loan is an anomaly, “standing apart from trends in the market,” according to Gary Tenzer, a principal and managing director at George Smith Partners, it does show the continued strength of the multifamily market compared to other property types.

“If you are looking at multifamily in Downtown L.A., everyone knows that multifamily values have skyrocketed, and so there is no question that you could refinance without putting cash in, even though lenders are a little more conservative than they were 10 years ago when original loans were made, there is enough appreciation in multifamily that there is enough room to refinance,” Tenzer tells GlobeSt.com. “However, values on office buildings haven’t changed that much in 10 years, and NOI growth has not moved that much on office buildings. Obviously, it is market determined and it is local, but in general, office rents have not grown at the same rate as multifamily, so values haven’t grown as fast. Since lending is more conservative now, anything that is not multifamily may not be able to get enough financing proceeds from a refinance.” Tenzer secured the funds on behalf of the borrower.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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