The Hangars: Playa Vista on the Next Level
The tech sector in Playa Vista is burgeoning, and with that, of course, comes creative office development. Dekel Capital managing principal Shlomi Ronen tells us that his real estate merchant banking firm has arranged a $9.1M debt facility on behalf of Santa Monica-based Brentwood Capital Partners for the development of a 22k SF creative office campus. To be called The Hangars, the setup is everything Millennials want, and then some: three classic postwar semi‐circular Quonset huts (metal!), originally functioning as manufacturing support facilities for the Howard Hughes Aerospace facility; the fourth property is a similar vintage property with concrete and bow‐truss ceilings.
Shlomi says that Dekel Capital proved out stabilized value once renovations are completed by performing a comprehensive market survey and guided tour for the lender, which included attendance by the entire team (sponsor, leasing brokers and property managers). The non-recourse debt facility, funded by an institutional NY-based debt fund, has a 24-month term and a flexible funding schedule. According to Shlomi, the biggest challenge was getting the lender comfortable with the speculative nature of the business plan as well as the property valuation, since the project is comprised of small (5k SF to 10k SF) single-tenant buildings, which is atypical for the larger footprint area. Other challenges included the limited availability of like-for-like rents and sales comps on the block. In the end, Brentwood Capital’s experience in the local creative office market, along with Dekel’s innovative strategies and custom approach, helped get the deal done. To get a closer look at The Hangars and for more information on our Bisnow partner, click here.