NYL Originates Generous Mortgage Loan for Leading Santa Monica Office Asset

By Gail Kalinoski, Contributing Editor

New York Life Real Estate Investors has originated $260 million in refinancing for the owners of the Water Garden phase 1 office park in Santa Monica. HFF placed the 12-year, fixed-rate loan on behalf of institutional investors advised by J.P. Morgan Asset Management.

The Water Garden Phase 1 consists of two six-story Class A office buildings totaling nearly 674,000 square feet and is located on about nine acres at 2425 Olympic Blvd. and 1620 26^th St. in Santa Monica. Part of a larger 1.27 million-square-foot office complex, Phase 1 was completed in 1990. Tenants at Phase 1 include Amazon, Edmonds.com, Group M Worldwide, Sony Computer Entertainment and AMC Networking Entertainment.

Located about 14 miles west of downtown Los Angeles in the Westside office submarket, the site is also near major freeways.  A light rail station will be built across from the property by 2016.

“We are pleased to add such an excellent quality property to our commercial mortgage portfolio,” Steve Kirk, senior director of loan originations in New York Life Real Estate Investors’ San Francisco regional office, said in a news release. “Water Garden is a top-tier office park with excellent tenancy and is located in one of the strongest office markets in Southern California.”

“New York Life Real Estate Investors has been, and continues to be, actively involved in secured real estate debt financing. During 2014, we originated over $5 billion in CRE loans with a similar target for 2015,” a New York Life Real Estate Investors spokesperson told Commercial Property Executive.

HFF’s debt placement team represented the borrower and was led by senior managing directors Mike Tepedino and Paul Brindley and director Jennifer Keller.

“The Water Garden has always been one of the top office assets in Los Angeles,” Brindley said in an HFF release. “Its position as the leading office asset in Santa Monica will be enhanced further by the sponsor’s careful consideration of strategic capital improvements to meet the evolving demands of the creative tenants that call Santa Monica home.”

Brindley said the future opening of the Bergamot/26^th street Expo Station across the street next year will mean the “asset will offer the best combination of institutional ownership, improvements and mass transit options of any major asset in West Los Angeles.”

The two firms have worked together in the past, including in January when HFF secured $21.2 million in acquisition financing from New York Life Real Estate Investors for a multi-family property in Brookline, Mass., purchased by an affiliate of Visconsi Companies, Ltd.