Moran & Company knows that maximizing proceeds from a multifamily investment is not a “one-size-fits-all” solution. We are a team of complex problem solvers.
One Santa Fe
One Santa Fe is a 438-unit apartment community built over 80,000 sq. ft. of commercial space on a land lease in L.A.’s emerging Arts District. It was financed with a long term FHA loan, LIHTC tax credits, New Market Tax Credits and additional financing from Canyon Capital. It was located in an area which was “close” to LA’s downtown. But its immediate neighborhood was almost exclusively industrial and was bordered by large rail yards. Moran & Company was retained to sell this property at completion of construction in late 2014 as the property commenced lease up.
This marketing assignment presented two significant challenges:
The emerging neighborhood had not yet emerged. Visually the neighborhood looked like a collection of abandoned and underutilized warehouses covered with graffiti. Investors could not “see” what was planned for each site. Instead they only saw a gritty, lifeless, warehouse district with almost no pedestrian traffic. With the exception of an occasional coffee shop, there were no recent generation rental properties or any visible residential amenities.
The capital structure was incredibly complex. Buying a property, subject to a ground lease with market rate resets, and sharing ownership with two types of tax credit investors was a financial structure that gave most multifamily investors significant pause. Moran knew that any buyer would have to be so confident in the overwhelmingly compelling real estate merits of this site that they would roll up their sleeves and work through its complex financial structure.
The foundation of Moran and Company’s marketing plan was to help this neighborhood emerge in the eyes of the investment community. It was to help investors understand that the Arts District was well on its way to becoming L.A.’s first authentic historic district, with the vibe of New York’s hip Meat Packing District.
To that end, we unveiled the story for every building and scripted driving and walking tours led by Moran and Company personnel that exposed the architecture of this hot new neighborhood. We unveiled plans for conversion of a 9-building Flour mill into the largest commercial art gallery in the world. We exposed acquisitions underway to convert the old Ford Factory and other significant industrial buildings into creative office space. We walked investors through craft breweries and took them to lunch or dinner at LA’s hottest restaurants that had recently opened in the area.
Moran and Company previewed this property with investors in their offices in a road show format when the property was less than 50% leased. We invited qualified investors to meet us in the neighborhood to get the benefit of our walking and driving tours. We fielded multiple competitive offers and put the property under contract before the property had completed its residential or commercial lease up.
This unique opportunity required a unique, sensitive and compelling marketing plan to consummate an early sale. Moran & Company was able to design and execute this plan and motivate the right investors to engage and bid.
One Santa Fe sold to Berkshire in January of 2016 for $178 million.