As part of our broader strategy of our broader strategy of financing new construction in fast-growing areas around the country, particularly those experiencing housing shortages, we’ve invested in the construction of 12 homes on a 14,202 square foot (0.33 acre) property in the North Hollywood neighborhood of Los Angeles.
Business plan
The borrower, Peterberg Construction, has already received the necessary entitlements and plans to break ground on the property in the coming months. Upon completion of construction, they intend to sell the homes and pay back our investment with the proceeds.
Why we invested
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Experienced local partner: Peterberg Construction focuses on the construction, renovation, and management of single and multi-family housing within the greater LA area. In the past three years, the company has completed nearly 50 single-family home renovations, making it the 125th largest home remodeler in the country.
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Fast-growing neighborhood: North Hollywood, known by locals as NoHo, is a charming community situated in the southeast portion of the San Fernando Valley. Known for its movie and TV production, the neighborhood close to a number of major producers including Warner Brothers, CBS, Universal Studios, NBC, and Disney. Located just outside the city limits, North Hollywood continues to benefit from the metro area’s strong population growth.
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Attractive margin of safety: The borrower has $1.4 million of equity which is junior to our position. They would have to lose their entire investment before our principal was threatened.
