A fully affordable apartment project is set to replace single-family housing in Los Angeles’ Koreatown thanks to new construction financing and the mayor’s directive to fast-track the approval of affordable projects.
Kian Investments, an entity controlled by Keren Management, secured $24.4 million to build Kingsley Apartments, a 136-unit affordable development, Commercial Observer has learned. Culver City-based Century Housing provided the 30-month loan with optional extensions and a 2.41 percent interest rate, property records show.
The borrower plans to break ground this month at 926-938 South Kingsley Drive, where it will build more than 72,800 square feet of residential space featuring a mix of studio and one-bedroom apartments with rents priced at 80 percent of the area median income.
The developer took advantage of Mayor Karen Bass’s Executive Directive 1 (ED 1) initiative, which aims to dramatically accelerate the pace and lower the cost of building affordable housing in the city by expediting the approval and permitting process for 100 percent affordable projects.
Colliers Mortgage’s Structured Finance Group’s Jonathan Lee and Shahin Yazdi, along with William Hyatt and Tommy Adelson, also of Colliers, arranged the financing.
“Kingsley Apartments exemplifies ED 1’s impact in our community,” Lee said in a statement. “We have a 100 percent affordable project in the heart of a dense urban community, with direct access to mass transit.
“Since ED 1 is a relatively new initiative, many lenders have not yet fully evaluated the product to offer competitive terms,” Lee continued. “Throughout this process, several banks considered ED 1 to be ‘too early,’ or offered terms in the 50-60 percent [loan-to-cost] range. Ultimately, we found a lender who understood the program and provided competitive terms and leverage. … Kingsley’s attractive LTC of 75 percent is achieved through creative financing due to favorable project returns despite the challenges in today’s multifamily lending market.”
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
