blogdowntown
Not currently logged in. [Login or Create an Account]

Stay Connected



 

$110 Million Condo Sale Pending at 705 W. 9th

By Eric Richardson
Published: Wednesday, April 14, 2010, at 06:45PM
705 W. 9th blogdowntown

The 35-story 705 W. 9th has sat empty since September, when developer Meruelo Maddux filed for Chapter 11 bankruptcy.

DOWNTOWN LOS ANGELES — Downtown's tallest residential tower has sat empty since developer Meruelo Maddux declared bankruptcy late last year, but the 35-story structure could soon be revived if judge Kathleen Thompson gives her approval next week.

of Corona has agreed to purchase the building from Meruelo Maddux for $110 million in a plan that appears to have the backing of the building's lender.

Update (Monday): Judge Kathleen Thompson this morning approved the building's sale.

The developer will pay Canyon Capital Realty a fixed payment of $86.5 million to settle its claims from an $84 million construction loan.

That money will come from the purchase, which is required to close within five business days of Thompson's approval. The sale agreement was first signed in February, and Watermarke has placed $5 million in escrow.

Both the sale motion and the settlement motion were filed with the bankruptcy court yesterday.

Meruelo Maddux had previously sought the court's approval to auction off some of the building's 214 units as condos. In a declaration attached to the sale motion, CEO Richard Meruelo said that several buyers came forward when the company put the whole structure on the market.

The hearing on the sale motion and the settlement agreement will be held on Monday, April 19, at 9:30am.

SHARE:

||

Related Stories:


Conversation

User_32

on April 14, 2010, at 08:58PM – #1

I work with this company (MM) often this will be a huge turning point for them and a great building to have on the market.


Guest 1

Guest on April 15, 2010, at 08:12AM – #2

Perhaps someone will be able to correct me if I am wrong. So, 214 units being sold for a grand total of $110 million. Doing the math, that comes to roughly $514,000 a unit. Is there some intersting retail space or space other than residential? I ask this because that seems to be a lot for the market these days. Granted, it is probably a really nice place and it is in a good location. But that seems pricey.


Guest 2

Guest on April 15, 2010, at 08:54AM – #3

MM is an opportunist that swept in to profit off of the LAUSD at Taylor Yards - Karma did eat his Dogma - Bankruptcy couldn't have happened to a "nicer" guy. I hope this project get's purchased and sold and that MM doesn't make a dime off of the project. GO DOWNTOWN!!! More residential = more retail and restaurants.


Eric Richardson () on April 15, 2010, at 09:45AM – #4

Guest: The building has 6,800 sf of retail space, and something like 252,000 sf in residential among those 214 units.


El Dabe Sherif on April 15, 2010, at 10:02AM – #5

I think that is a fair price and a good opportunity for the buyer in this market. All the units will eventually be sold and Watermarke will make a pretty decent return. I am surprised the retail space is so small, but that is a pretty good way to make a profit too.


Jared Zanini on April 15, 2010, at 10:09AM – #6

That residential space is just going to be that seafood restaurant right?


Guest 3

Guest on April 15, 2010, at 12:05PM – #7

I hope that the new owner will do something to rectify the hideous parking garage facade.

D


User_32

LoftLiving on April 15, 2010, at 02:56PM – #8

A quick back of the napkin proforma for the retail only nets a value of approx. $2.0 to $3.0 million, depending on the assumptions.

Either way not a lot of money to add to the residential sales component. So I think Guest has it right...they will have to sell the condos for more than $500k per unit to make a profit (assuming their purhcase price is $110 million).

Are these very large units..??? Mostly 2+2's as opposed to studios or 1+1's????


User_32

Downtown Cowboy on April 15, 2010, at 05:46PM – #9

Whoa! I hope these buyers know what they're doing. They are paying high retail for this building. There's no way these units would bring $514,000 retail on the market today. However, I am glad that finally the building will be occupied.


Guest 4

Guest on April 15, 2010, at 06:57PM – #10

I doubt they'll put these units up for sale. Check out they company's website and you'll see that they mostly manage apartment properties.


Eric Richardson () on April 15, 2010, at 07:25PM – #11

Guest 10: That's certainly possible. The building was built as a rental building, but to condo standards, so it could go either way.


Guest 5

Guest on April 15, 2010, at 09:39PM – #12

yeah right ..MMPI is lying..I bet this is a last desperate attempt for them to decieve the judge...these guys first class sharks an they will do anything to cloud up the situation. These guys go back and karma has well came back to them. well deserved mmpi


Guest 6

Guest on April 16, 2010, at 11:35AM – #13

I looked at this deal as a bulk buyer. Watermarke is about 10M above where the other bidders were. The deal makes little economic sense, even given the low cap rates that have been demonstrated on recent core trades. As Watermarke are apartment investors, they are not looking at the deal as a condo sell out, rather a long term hold. It is a foolish price....


Guest 7

Guest on April 17, 2010, at 07:48PM – #14

so what does MM get away with? for all the hard work and their greed are they going to get paid anything? if I recall these idiots had a $50 million loan on top of the $85 million they got from Canyon. So they will be able to pay that back and have another $25 million towards the $50 million they had already spent.

At the end of the day, these idiots deserve all they have faced since their bk!


User_32

MadMike on April 17, 2010, at 10:45PM – #15

Me smells a fish in this deal.


Guest 8

Guest on April 18, 2010, at 10:50PM – #16

Assuming the 7k sf of commercial is worth $10 million, that leaves the remaining residential at $397/sf which is in line with other high-end properties downtown. Given the building's height, views, location, and amenities, that price doesn't seem unreasonable.


Guest 9

Guest on April 19, 2010, at 07:26AM – #17

yeah but there are no rents, few years of no rent, untill they fill up the building. Watermarke seems to have a lot of money and they want to blow it.

as long as MM doesnt end up with the property Im ok.


Guest 10

Guest on April 19, 2010, at 01:00PM – #18

I don't understand why there's so much hate for a developer that has brought so many buildings to downtown. I realize that not all of their business practices may be what you'd wish, but it seems like without MM (and SB for that matter) downtown would be a lot more empty.


User_32

Downtown Cowboy on April 21, 2010, at 11:06AM – #19

I'm glad the building is not going to sit empty any more, and I'm glad there will be new (affluent) households contributing to the economy of downtown. More people means more income for the local businesses.


Eric Richardson () on April 21, 2010, at 11:22AM – #20

I'll be honest, I'm fascinated and confused by all the negativity toward this deal. As Downtown Cowboy noted, how is it not a good thing for an empty building to get closer toward moving new people into Downtown?



Add Your Voice

In an effort to prevent spam, blogdowntown commenting requires that Javascript be enabled. Please check your browser settings and try again.

 

Search:


Story Location:

Loading... Please wait.




On Twitter

New Comments


Recommendations



blogdowntown Photo Pool

Photos of Downtown contributed by readers like you.

Downtown Blogs


Downtown Sites


Elsewhere