Fifteen Group, a Miami-based real estate firm, has undertaken a significant financial move in Los Angeles, successfully refinancing the Wyvernwood apartment complex. The complex, boasting 1,175 units, is located in Los Angeles’ Boyle Heights neighborhood. The refinancing has been accomplished through a new $162.9 million loan from MF1 Capital, a multifamily-focused lender, according to a report from The Real Deal.
Located at 2901 E Olympic Blvd., Wyvernwood is a garden-style apartment offering a mix of one-, two- and three-bedroom options, its website shows. The property also features several community amenities, such as a computer center, laundry facilities and a playground.
Fifteen Group secured two substantial loans from MF1 Capital, which converted one of the loans associated with the Wyvernwood property into a collateralized loan obligation (CLO), a financial instrument often used in securitization. The report notes that the entire CLO amounts to $895 million with an average interest rate of 8.87 percent, citing information from Morningstar. The report further notes that Fifteen Group plans to refinance with a fixed-rate, commercial mortgage-backed securities loan when the market improves.
As per Morningstar’s evaluation, Wyvernwood currently holds an estimated value of approximately $233 million. However, a closer look at the financial data indicates that, as of the loan’s securitization last month, the Wyvernwood property had a debt service coverage ratio of 0.79. This ratio signifies that the property’s cash flow was insufficient to adequately service the existing debt.
Fifteen Group acquired Wyvernwood in 1999, following an incident where city health officials discovered lead-contaminated paint on the interiors and exteriors of the apartments, ultimately forcing the previous owner to sell. In 2007, Fifteen Group proposed an ambitious $2 billion redevelopment plan to transform Wyvernwood into high-rise condominiums, effectively quadrupling the size of the complex. However, this proposal faced strong opposition from both Los Angeles city officials and the complex’s tenants, culminating in a tumultuous chapter in the property’s history.
Fifteen Group was founded in 1992 and is based in Miami with additional Los Angeles offices. The firm invests in all major real estate asset classes, according to its website.
