Point Dume Shopping Center owner Zan Marquis took out a $42.1 million loan on the shopping center, as well as other assets, to acquire a major condo development in Santa Monica. The news was announced by NorthMarq, the company that arranged the loan.
Marquis did not wish to comment on the loan, but said in an email Tuesday morning, “Pt. Dume Village not for sale.”
In April, Marquis purchased a one-acre development site in Santa Monica for $21 million with plans to build 20 luxury condominiums. Located at the intersection of Ocean Avenue and San Vicente Boulevard, the planned condo site in Santa Monica overlooks the Pacific Ocean, the city’s Ocean Front Walk and the nearby Annenberg Community Beach House.
“What I believe he intends to do is he probably put up Point Dume Center and other assets that he has in order to close out the Santa Monica transaction,” said local leasing expert Tony Dorn, who is not associated with the Marquis Property Company.
The loan, known as a bridge loan, typically lasts for one to two years, Dorn said. But Marquis’ $42.1 million loan is termed for three years, according to the National Real Estate Investor website.
“The lender was very creative and able to provide a structure that provided alternatives and optionality required to pull off the acquisition,” Robert Hervey told the National Real Estate Investor. Hervey is executive vice president and managing director of NorthMarq.
“Developers and brokers, we take out these types of loans all the time,” Dorn said. “Not everybody has $50 million sitting in the bank at all times.”
According to a release issued after the Santa Monica acquisition, Marquis plans to begin construction on the “luxury villas and penthouses” sometime next year.
Plans for the condos have been in the works since 2007 when Dallasbased development firm Trammell Crow purchased a 47-unit apartment complex on the lot. All permits, plans and project materials for 301 Ocean Avenue have now been turned over to Marquis from Trammell Crow.
Despite rumblings around town late last year that Marquis was trying to sell the Point Dume Village, it now appears Marquis is likely to maintain his ownership.
“It’s possible that he could have a carve-out provision in the loan, which means if he got an offer [on the Point Dume Village] he would have to pay off that loan or take out another loan,” Dorn said.