Los Angeles, California

Figueroa Arms Condominiums

75-unit Los Angeles conversion

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Location: Los Angeles, California
Units: 75
Year built: 1925
Underlying mortgage: Yes - three mortgages + unpaid property taxes

The challenge

Unit values were 1/2 or less than they were at the market height with some owners being up-side-down with their mortgage vs market value of the units. Some owners were forced into foreclosure, further reducing unit values.

There were no lenders that were willing to finance new purchasers or refinance existing member loans. Units sold all cash at depressed prices.

Years of unpaid property taxes, deficit spending and three mortgages had the co-op facing foreclosure.

Unit values were 50% or less than they were at the market height as then owners up-side-down with their mortgage exceeding market value of the units. Vacancies and lease abandonments were spiraling out of control, further constraining cash flow for operations.

The outcome

The project record reports stronger market acceptance and higher sale prices after conversion. Some owners who wanted to sell were able to repay their loans, reducing foreclosure pressure in the building.

As condominiums, the units became eligible for a broader lender pool. The project also obtained Fannie Mae approval.

Hutton arranged a new Group Loan for the condominium HOA that paid off all obligations and left cash for reserves.

The project record reports that conversion, management realignment, remarketing, and property improvements increased values by 50%-100%. The resulting equity helped prevent foreclosure.