DJM Capital plans to renovate a Torrance shopping center with a new $75 million loan.
The firm scored the loan from Deutsche Bank last month on the 181,300-square-foot Village Del Amo retail and office complex at 21221 Hawthorne Boulevard, according to property records filed with Los Angeles County.
DJM will use the proceeds from the loan, which is labeled as a construction loan in records, to “refresh the center” and effect a “complete repositioning,” according to a release from DJM last week, meaning renovation and capital improvements.
Deutsche Bank provided the variable-rate loan, which also serves as a refinancing. Terms of the loan were not disclosed. In 2018, Deutsche Bank provided a $63.1 million loan on the property, records show.
DJM has owned the property, which sits directly across from Simon Property Group’s Del Amo Fashion Center, since 2004.
Tenants at the property include BevMo!, Benihana and Red Lobster, as well as Hannam Market, a Korean grocery store chain that recently opened. About 23,000 square feet of restaurant space is currently available for lease.
The loan is one of the few Deutsche Bank has issued across L.A. County in the last three months, according to an analysis of county records. The bank has issued three commercial loans since September.
Although the retail sector has bounced back from the initial impact of pandemic-related closures, and retail vacancies have hit national all-time lows, delinquencies have risen in recent months, according to loan packager Trepp. In September, the delinquency rate for retail properties jumped 15 basis points from August to 6.62 percent.
DJM has doubled down on retail in California over the last year. In March, the firm bought four retail centers from Sonoma County to San Diego in partnership with Fortress Investment Group. Two centers in Orange County were priced at $125 million.
In a move to diversify its assets, the firm plans to build a 300-unit apartment complex at its shopping center in Huntington Beach, replacing two existing retail buildings.
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