The Fine Arts Building

The Fine Arts Building
Los Angeles, California

Property Address:
811 W. 7th St.,
Los Angeles, CA 90017

Originally constructed in 1927, The Fine Arts Building was and continues to be one of the most historically significant buildings in Downtown Los Angeles. It had been renovated in 1984 but by 1998, the project had a large debt that was coming due, and the value of the building was considerably less than the mortgage. The current ownership syndicate did not have capital to handle tenant rollovers much less pay off or refinance the debt.

BPG and its partners negotiated a purchase of the note for a substantial discount and concurrently negotiated an arrangement with the ownership to hand over the title to the building once the note acquisition was completed from the New York-based institutional seller. Upon completion of the acquisition of title to the property, the building was completely re-leased under new leases with extended terms and substantially higher rental rates. The occupancy was also increased from 84% at acquisition to 99% within three years. In addition, the electrical systems were replaced, and substantial improvements made to the life safety systems. The project was then sold in 2003 for a significant profit.