The refinancing of debt on a Sherman Oaks Class A office buildings will help improve and market the property once a major tenant leaves.
The eight-story, 88,000-square-foot building at 5805 Sepulveda Blvd., owned by 5805 Sepulveda Partners LP, has received a $15 million bridge loan from L.A. commercial real estate lender Calmwater Capital, according to the company. The new arrangement includes a 24-month term loan to pay off the remainder of an existing debt, and a $2.85 million loan.
The smaller loan will fund tenant improvements and broker commissions as part of an aggressive leasing strategy to fill the remaining 35,000 square feet that will be left once a major tenant exits the 27-year-old building, Calmwater Capital said. The tenant’s departure will drop the vacancy rate to 60 percent.
Sepulveda Partners has owned the property since 2002.
“Given that this Class-A asset is located in a predominately Class-B market, 5805 Sepulveda has a substantial competitive edge over similar assets in the vicinity,” David Weiner, managing partner of 5805 Sepulveda Partners, said in a statement. “By extending our debt servicing timeline and providing ample time to lease-up the property, Calmwater has allowed us the flexibility we needed to fully attend to this well-performing asset.”
“With the rising level of delinquencies in the CMBS (commercial mortgage-backed securities) segment, this timely debt payoff allows for improvement on the asset, leading to increased market appeal and opening opportunities for growth in its net operating incomes in the mid- to long- term,” said Larry Grantham, co-founder of Calmwater Capital, in a statement.