Developer Geoff Palmer has secured a $128 million refinancing for his 566-unit Orsini II residential complex in Downtown Los Angeles.
Walker & Dunlop provided the fixed-rate loan, mortgage documents show. It replaces a $115.2 million floating rate loan from 2016 that Palmer’s company, G.H. Palmer Associates, had on the property. Walker also provided a $158.8 million refinance on a Palmer multifamily property in Santa Clarita.
Century City-based George Smith Partners arranged both the 2016 loan and the new one that replaces it, the firm announced. The new financing package is a 10-year, non-recourse loan at 4.24 percent.
George Smith Partners Principal Gary M. Tenzer said the decision to seek a fixed-rate loan was a response to last year’s interest rate hikes, which could have been costly to Palmer if the floating rate loan rose.
The Federal Reserve pushed its target rate up a full percentage point over the course of 2018, ending the year at 2.25-2.5 percent, prompting banks to increase commercial loan and mortgage rates in kind. The Fed has since backed off plans to continue the increase, and has left its benchmark rate untouched. President Trump, who is a friend of Palmer’s, was among those criticizing the interest rate hikes.
The Orsini II is located at 550 N. Figueroa Street, near a handful of Palmer’s other apartment complexes.
Palmer has also refinanced three other L.A. properties in a little more than year. In February 2018, he secured a $234 million refinance on two Downtown apartment complexes totaling 900 units. Then in June 2018, he refinanced a Santa Clarita property with a $158.8 million loan.
G.H. Palmer Associates owns about two dozen properties in Southern California. The company is being sued for allegedly illegally withholding security deposits from tenants across multiple properties.