TPG forecloses on Sandstone apartment project near Playa del Rey

TPG Capital has foreclosed on a Sandstone Properties-owned multifamily development site near Playa del Rey, after Sandstone defaulted on a loan tied to the property earlier this year, The Real Deal has learned. 

A limited liability company tied to TPG Capital in Fort Worth bought the property through a foreclosure auction, according to a trustee’s deed filed with Los Angeles County in August. Sandstone did not respond to a request for comment. 

TPG paid $29.9 million for the 2.3-acre site at 6733 South Sepulveda Boulevard in Westchester, where Sandstone built a 176-unit complex called Silicon Beach Live. The apartment complex was finished in April, reports said, but apartments are not yet available to rent, according to online listings for the property. 

The foreclosure allowed TPG to take the building for cheap — but wiped out TPG RE Finance Trust’s original loan on the deal.  

TPG made a partial credit bid, equal to an amount that was owed to Pacific Western Bank through a separate construction loan, according to a notice of trustee’s sale outlining TPG’s plans. 

In 2019, Pacific Western provided Sandstone with a $57.5 million construction loan for the complex, records show. Harbor Group International also funded a $24.3 million preferred equity investment in the development, funding that was fully paid off in 2022. 

TPG then gave Sandstone a $97 million loan to refinance the development in 2022, records show. 

In February, Sandstone owed nearly $80 million under TPG’s loan and failed to make monthly debt payments in December, January and February, according to a notice of default filed with L.A. County. 

The developer also failed to meet certain completion deadlines for the project, which counted as an event of default.