1322 W Maryland St, Los Angeles

The LAAA Team of Marcus & Millichap is proud to announce the successful closing of 1322 Maryland St, which we listed and sold for the bank that foreclosed on the previous owner. This property has 4 apartment units on it currently, but it was sold for land value to a developer. The previous owner had unapproved plans to build a 7 story, 62 unit TOC project before losing the property. The new buyer is most likely going to pick up where the previous owner left off and try to get those same plans approved to build 62 units.

Property Overview

This 8,111 square foot lot has excellent zoning of CW and TOC Tier 3. Per a 3rd party's zoning analysis, a developer can build up to 40 units by-right, or up to an impressive 70 units using the TOC bonus. Due to the small size of the lot combined with the very dense zoning allowance, we believe this property would be perfect for an affordable developer who designates some or all of the units to low income housing, however this could still work for any type of developer. Currently, there is a 4,976 square foot, 4-unit apartment building on the lot which was built in 1922.

Deal Story

One of the banks that we have a great relationship with reached out to us in February this year to tell us about this property. At that time, they were in the foreclosure process on a borrower that stopped making payments during COVID. While in the foreclosure process, another lender who was in second position on this property offered to buy our client's first position at $1.6 million (the outstanding principal balance due to our client was over $2 million). So when this client initially reached out to us, they wanted our opinion of value which they would use to make a decision to either; 1) cut their losses and sell it for $1.6 million right then, or 2) take the risk of finishing the foreclosure and selling it on the open market afterwards for hopefully a lot more money. Either way, they were going to lose money on this loan, so it was not easy to pass on the bird in the hand.

Over the past few years, we have built up a lot of trust with this bank by always being honest with them. We have passed on business when we knew a different avenue would be more beneficial for them, and when we advised to list their properties with us instead, we have always delivered within our expected sales price range. With our hard earned goodwill, this bank often relies on the values we tell them to make important business decisions.

After we finished our...