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TPG unloads foreclosed Westside multifamily project for $56M
US arm of Tokyo-based construction firm buys 176-units in Playa del Rey
TPG Real Estate Capital has unloaded a 2.3-acre multifamily development site in Playa del Rey, just a few months after foreclosing on the property.
Kajima USA, the U.S. arm of Tokyo-based construction firm, bought the site and 176-unit complex at 6733 South Sepulveda Boulevard for $56 million, according to property records filed with L.A. County in December.
The sale price comes to about $320,000 per unit, although it’s unclear how much work remains to get the project ready for occupancy.
TPG foreclosed on the property in October through a $29.9 million partial credit bid, meaning TPG could acquire the assets by relieving part of the debt, without paying actual cash.
The sale to Kajima still came at a loss for TPG.
The Texas-based investment firm had handed out a $97 million loan to Sandstone Properties in 2022, records show.
Sandstone then defaulted last year, owing nearly $80 million under the loan and failed to make monthly debt payments in December 2021 and January and February of 2022, according to notices of default filed with the county.
Sandstone had planned to build 176 units on the site, called Silicon Beach Live. Reports said the project’s shell was completed last April, though default notices state that the developer failed to meet certain completion deadlines for the project.
It’s unclear whether Kajima will complete the process of finishing the site. The firm, which did not respond to a request for comment, has been planning residential projects across the U.S. for the last eight years, including condo developments in Florida and industrial sites in Texas.
As part of the sale to Kajima, TPG was on the hook for $3.3 million in transfer taxes, given the property is located in the city of L.A. and subject to a 5.5 percent tax.