Real Estate Broker · Pasadena, CA · Member since 2017 · 12 posts · 15 votes
Today i met with a client and he shared something with me. With Chase's rates on a quick rise to the neighborhood of 4.29% for multi-family lending, he wanted to explore his options with other lenders and settled with East West Bank. As luck would have it, East West Bank is now requiring a hold back of funds for retrofitting. This does not only refer to the city of Los Angeles mandate, where soft story retrofitting is already required and owners have 7 years to remedy, this was a multi family unit in San Gabriel with tuck under parking. Again, this was a lender requirement and not one put forth by the city. The 3 conditions that the lender had required before closing were as followed.
1)get an engineer out to estimate costs 2) bank will hold back 1.25x the cost of fixing it and it will not be released until fixed 3)6-9 months after close have the retrofit work completed.
If the loan was $1m and the estimated costs for retrofitting is $100k, then they would only give you $875k and hold the $125k, not to be released until work is complete. Be careful when investing in multi family units with Soft story structures because, even if it is not required now, it will likely become something you have to fix in the future
Glendale, CA · Member since 2016 · 2 posts · 3 votes
9y
It is really interesting that they are requiring this outside of the City of Los Angeles. I am a structural engineer here in Los Angeles and have some experience with the Soft Story ordinance. It is less common for multi-family buildings, but there is also an ordinance for concrete building built before 1980. Also the City of West Hollywood and Santa Monica recently passed soft story ordinance and neighboring cities are looking into following in the same direction.
Real Estate Broker · Pasadena, CA · Member since 2017 · 12 posts · 15 votes
9y
@Phil Hong If you're just wanting to look at a map then http://graphics.latimes.com/soft-story-apartments-needing-retrofit/ is good because it's visuall mapped out, though i don't know if this is a comprehensive. So for that reason, if you have a specific address you are looking for then I would recommend you go on the county website https://www.ladbsservices2.lacity.org/OnlineServices/?service=plr
Glendale, CA · Member since 2016 · 2 posts · 3 votes
9y
It is really interesting that they are requiring this outside of the City of Los Angeles. I am a structural engineer here in Los Angeles and have some experience with the Soft Story ordinance. It is less common for multi-family buildings, but there is also an ordinance for concrete building built before 1980. Also the City of West Hollywood and Santa Monica recently passed soft story ordinance and neighboring cities are looking into following in the same direction.
Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
9y
More likely it will cover all of LA County. I too am an engineer and wouldn't be surprised if city officials especially those of safety minded. I guess it will make sense that banks, since they own it partly will comply these requirements sooner than later. What doesn't make sense is, they are relying on an engineering estimates than that of a contractor. I'm pretty sure the figures will be inaccurate, and 25% difference MIGHT cover it, but that 25% won't cover soft costs and additional requirements when doing the work.