Condominium Complex Construction in Downtown LA
CHALLENGE: $28M ground up multifamily construction in downtown LA. 65% loan to value and 80% loan to cost. Sponsors are professional with limited development experience. Loan to cost are aggressive and sponsors had minor equity investments.
SOLUTION: Created a development board that was hired to oversee the project. A top construction fund manager was mandated. Sponsors were required to invest additional capital. Costs were substantially reduced by adjusting the budget whereby reducing marketing rents and vacancy issues. Developer profits were unchanged.