Panorama interests has secured $ 104 million in a home loan to finance the lease of City Gardens, a new-build Class A home in San Francisco. While the investor ultimately secured the three-year floating rate loan through Ready Capital, funding was difficult to obtain due to the rapid market dislocation caused by the pandemic.
“The market conditions when we launched the offering in late summer 2020 were particularly challenging in San Francisco,” said Alex Witt, Managing Director of JLLtells GlobeSt.com. “Concern about a second wave of COVID-19 and a hypothetical exodus from San Francisco was at its peak. It was worth seeing those fears subside as rents in the Bay Area began to rise again. “Witt secured the financing on behalf of the borrower with the senior managing director Charles Halladay and managing director Jordan Angel, associate Jonah Aelyon and analyst Lauren midnight.
As with most deals during the pandemic, the quality of the sponsor and property helped close the deal. “Lenders benefited from the sponsor’s on-site experience in successfully leasing similar assets, as well as the units’ value proposition,” says Witt. “Panoramic has meticulously created a first-class rental experience. The transaction was also on the big side and presented a great opportunity to increase exposure to several apartments. “
The capital markets team also helped facilitate funding by providing local market metrics to potential lenders to demonstrate the long-term strength of the market. “In addition to thoroughly examining the entire credit universe, JLL provided comparable statistics for rental properties across the West Coast, as well as statistics that demonstrate the Bay Area’s continued dominance as the Mecca of technology. As soon as the lenders were able to view the asset, the project sold itself, ”says Witt.
This deal hit the market in the depths of the COVID-19 pandemic and the borrower was able to secure funding. When the market improves, so does capital availability. “Successful execution shows that even during the bottom of the San Francisco pandemic, capital was available for assets in San Francisco,” says Witt. “The current credit market continues to improve and the availability of capital continues to increase.”
City Gardens is an apartment building with 200 residential units and a mix of micro-units with two, four and five bedrooms. The property also features fully furnished bedrooms and living areas, city views, 9-foot ceilings, and a sustainable design with high-efficiency lighting and plumbing, laminated heat-resistant glass, and energy recovery ventilation.