Marcus & Millichap, a subsidiary of Marcus & Millichap Capital (MMCC), has offered a $34.5m construction loan for a 48-unit condominium development project in Pasadena, California.

The development is the second of the project, whose first phase involved converting the adjacent office tower into 57 condominium units. The second phase will include 48 units above a parking structure, the company said.

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The six-storey, 62,075ft² project is expected to be completed next year and it will include amenities such as hot tub and outdoor entertainment area. The average size of a unit will be 1,243ft².

MMCC loan analyst Stefen Chraghchian said: “After completing the first phase of the project, with financing from another intermediary, the developer asked us to create a more flexible and competitive financing option for the second phase.”

The loan given to the developer is for a period of 30 months and it has been structured with 5% adjustable interest rate and 40% loan-to-value.

MMCC capital markets senior managing director Sharone Sabar and Stefen Chraghchian arranged the loan.

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Chraghchian continued saying: “The structure of the deal was complex as the unsold units from Phase I were attached to the Phase II loan as collateral.

“We negotiated a payout structure for unit sales that would pay down the loan balance over time while allowing the developer to access more immediate sales proceeds.”

Sabar said: “Being in the midst of the Covid-19 pandemic added an additional challenge. We emphasized the importance of timing to all parties and pushed to close as quickly as possible.”

Earlier this month, Marcus & Millichap had sold a 12-property, 96-unit multifamily portfolio in San Diego, California, for $23.75m.

All the properties are claimed to be located within walking distance of downtown San Diego in the city’s Bankers Hill and Golden Hill neighbourhoods.

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Marcus & Millichap offers loan for development of phase II of condominium project in US. (Credit: Unsplash/Szabo Viktor.)