LWK Partners and Cypress Equity Investments plan to increase the density of multifamily properties they own in Los Angeles after securing a $100 million credit facility.
Hong Kong-based LWK and Los Angeles-based Cypress locked down the credit facility from local firm Ascent Developer Solutions, the Los Angeles Business Journal reported.
The developers debuted their partnership in January, and the financing will speed its plans to build more units at existing properties.
The deal comes a little over a year after Gov. Gavin Newsom signed SB 1211, which increased the number of detached accessory dwelling units that are allowed to be built on multifamily lots. Part of the facility includes the $30 million recapitalization of seven LWK properties for the addition of 50 ADUs.
In their efforts as co-general partners, Cypress is charged with heading development while LWK focuses on acquisitions, said LWK co-founder and partner Austin Nissly.
It isn’t the first time Cypress has worked with Ascent. The deal for a so-called “rinse-and-repeat facility” allows LWK and Cypress to shift back and forth between acquisition and construction loans as they take up more projects.
The goal is to increase LWK’s portfolio from 200 multifamily units to 5,000 over the next five years, with transactions between $3 million and $10 million being ideal targets. To do this, LWK and Cypress will juggle acquisitions and holdings under LWK ownership that can be revamped for workforce housing.
As it stands, LWK’s properties are concentrated in West Adams and Mid-City, but the firm has expressed interest in Santa Monica, Hollywood, Leimert Park and the San Fernando Valley.
LWK and Cypress recently bought a 20-unit property in Hollywood for $4 million; the companies plan to add eight ADUs with a cost per unit for one-bedrooms of less than $150,000.
Another project from the joint venture involves three eight-unit buildings on three parcels with plans to add four ADUs to each parcel, upping density by 50 percent.
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