SANTA ANA — A long-awaited multifamily development in the South Coast Metro area, dubbed Legado at the Met, has received $128 million in construction-to-permanent financing.
The funding hails from a trio of undisclosed insurance companies.
Though the borrower, Beverly Hills-based developer Legado Companies, had the option to finance the 278-unit apartment complex with major banks, “the weighted cost of capital and the weighted interest rate between all three insurance companies was still less than what the banks were willing to offer,” Gantry Inc. Principal George Mitsanas told the Business Journal.
San Francisco-based Gantry provides financing and lending services for commercial real estate projects and represented Legado in the latest deal. The latest financing equates to nearly $460,000 per new unit.
Insurance companies have become the preferred source of capital after last year’s banking crisis, Gantry officials said.
“Those banks went under for reasons unrelated to real estate, but borrowers are still being cautious,” Mitsanas said.
Gantry Principal Amit Tyagi and the commercial mortgage banking firm’s Los Angeles office together secured the loans on behalf of Legado.
Legado at the Met will deliver in the next 30 months, according to Mitsanas. The groundbreaking at the project’s vacant lot in Santa Ana took place this month.
Busy Neighborhood
The development site is located not far from the intersection of the Costa Mesa (55) and the San Diego (405) freeways, at 200 E. First American Way.
The site is near the headquarters of Santa Ana-based title insurance giant First American Financial Corp. (NYSE: FAF), and across the street from the tallest residential development in Orange County, the Essex Skyline complex, whose two towers run 25 stories each.
The immediate area’s seen numerous multifamily projects built over the years, and Legado’s development site has been eyed for various developments for well over a decade.
At one point, a high-rise was considered for the land by a prior developer. Hotel uses have also been considered.
Legado bought the 3.8-acre site out of receivership in 2013, for a reported $17.3 million.
“This strategic location is at the confluence of Orange County’s top professional submarkets: Irvine and South Coast Metro,” officials said.
OC Projects
Legado at the Met received approvals from the city of Santa Ana about a year ago.
The six-story development will comprise of studio, one-, two- and three-bedroom units—some of which will be lofts—ranging from around 612 to 1,783 square feet.
The complex will also have a four-level, 617-space parking garage; three of those levels will be subterranean.
The developer has entitled, built, sold and invested in several multifamily developments in OC.
The company most recently invested in Park Apartments Irvine, a 193-unit complex it acquired for $21.5 million in 2020.
Five years prior, Legado Cos. sold a Santa Ana asset, a 2-acre land parcel at 301 Jeannette Lane to developer Wood Companies for nearly $16 million.
The 183 units planned for the complex, now dubbed Prisma, completed in 2018. Wood Cos. then sold the property to multifamily firm Western National Group for nearly $80 million, or around $434,000 per unit, in 2020.
Legado Cos.’ other projects can be found in Culver City, Playa del Rey, Redondo Beach and Encino, among other cities.
