LOS ANGELES, CALIFORNIA (March 24, 2023) — Northmarq’s Zalmi Klyne, senior vice president/managing director, and Stanley Chu, senior vice president, assisted Golden Bee Properties in the purchase of Mountain View Manor, a 200-unit LIHTC multifamily property located at 12960 Dronfield Avenue in Sylmar, California. Northmarq’s Los Angeles debt/equity team assisted with the loan assumption and arranged the preferred equity.
“This deal has been a year in the making,” said Chu. “Originally scheduled to close middle of 2022, the markets shifted, and the lender could not commit to funding as they had warehousing issues and widened spreads dramatically. The significant increase in spreads negatively impacted the deal economics for the sponsor enough that the deal no longer made sense.”
After running scenarios for the sponsor, Klyne and Chu found that if their client assumed the current agency loan and took a bigger preferred equity piece, the economics still made sense. “It was a long road as the structure was very complicated to get agency approval,” said Klyne. “The sponsor finally closed on the acquisition in March 2023, with a final purchase price of $39.5 million.”
The property is 100% affordable and with a non-profit partner the property qualifies for real estate tax exemption. Built in 1964, the two-story garden-style community offers studio, one-, two-, and three-bedroom apartment homes. Each unit features wood linoleum floors, spacious closets, air conditioning, and ceiling fans. Community amenities include: laundry facilities, clubhouse, controlled access, on-site maintenance, on-site property manager, spa, on-site parking, and sundeck. “We intend to spend $1.5 million in exterior upgrades, renovate half of the unit interiors, as well as add 17 ADUs over the next five years,” said David Berneman, CEO of Golden Bee Properties.
Residents enjoy easy access to major highways and public transportation. Located approximately 25 miles northwest of Downtown Los Angeles, the property boasts a charming neighborhood with breathtaking mountain views and plenty of outdoor recreation. Mountain View Manor offers four parks within a 15-minute drive as well as three shopping centers within a 15-minute walk.
To learn more about the Los Angeles market, view Northmarq’s Los Angeles Q4 Multifamily Market Report.