News

As we draw close to the one-year anniversary of the start of the Covid-19 pandemic, its impact continues to reverberate throughout the commercial real estate industry. While the real estate market is constantly in flux, the pandemic has added an extra layer of instability on top of those normal market changes.

Among those most impacted are multifamily developers that broke ground prior to the pandemic on projects which were completed in 2020.  

In Disney’s 2019 animation hit, Frozen II, Princess Elsa sings a harrowing song called “Into the unknown,” as she heads into a world that she has not seen before.

Similarly the real state capital markets are headed “into the unknown” in 2021, a year that is framed by polarizing optimism and pessimism as we manage through a continuing global pandemic that no one has (thankfully) experienced in their lifetime.

With the Presidential Elections now behind us, we have a little less uncertainty about what the future will hold from an economic and regulatory standpoint allowing all of us to focus on the challenges of the pandemic.

The commercial real estate industry continues to face challenges as the pandemic has accelerated trends, such as Internet shopping, and given rise to regulations, such as eviction moratoriums,

Economic uncertainty is changing lending practices, but that doesn’t mean there isn’t financing available for commercial real estate in Los Angeles.

The trick, though, is finding that financing and getting the right terms.

“Whatever underwriting people were using in January and February has clearly changed now,” said Kevin Shannon, co-head of capital markets at Newmark Knight Frank. “The loan terms — they are getting so dramatically different from what they were.”

While some lenders are “afraid to make bad loans,” Shannon added,

Latigo Group has locked in $59 million in construction financing for a 152,000-square-foot multifamily development in the northwestern part of Greater Los Angeles, according to Dekel Capital, which arranged and announced the funding.

Dekel said the financing was provided by a publicly traded real estate investment trust and a life insurance company.

Latigo has started work on the project at 299 East Thousand Oaks Boulevard, which will be the first significant multifamily project in Thousand Oaks since 2007.

LOS ANGELES — Los Angeles-based Dekel Capital, on behalf of Los Angeles-based CGI Strategies, has secured $47.8 million in non-recourse construction financing for the development of a multifamily community located at 837 S. Fedora St. in Los Angeles.

Provided by a national lender, the loan will be used for the construction of a seven-story concrete and wood building over two levels of subterranean parking in the Koreatown neighborhood.