Meritz Real arranges $45 mn debt investment in Carlyle’s LA studio

Meritz Real Estate Asset Management Co. Ltd. has completed a $45 million investment in a three-year senior debt on the Carlyle Group-owned Manhattan Beach Studios (MBS) Media Campus south of Los Angeles for South Korean institutional investors.

The variable-rate loan is part of $180 million senior loans originated by private equity firm Carlyle to refinance the production facility in California, according to investment banking sources last week.

The loans were split into A and B notes, and Seoul-based Mertiz Real underwrote the B tranche entirely.

The B note is expected to generate an annual return of around 7%, with a loan-to-value ratio of 51%.

Meritz Real sourced the high-yielding investment, a type of assets hardly accessible for South Korean investors before. The investment was also made ahead of expected US rate hikes.

Carlyle’s US real estate arm, Carlyle Realty Partners, acquired the entertainment production complex for $150 million from Oaktree Capital Management in 2007.

The value of the property, reassessed for the refinancing, has increased to $350 million, according to the sources.

Located in Manhattan Beach, California, MBS Media Campus houses film and television production facilities covering 55,000 square meters.

It was home to various network television series such as CSI: Miami and Boston Legal and films like Iron Man 2 and the Avengers.

It will host the US-based stage production of James Cameron's next four “Avatar” sequels.

Its tenants include major US film studios and US TV networks such as HBO, CBS and Fox TV. The vacancy rate has been below 10% for the past 10 years.

Meritz Real Estate has sourced diverse global investments, including debts secured on a US building and a portfolio of shopping malls in Italy, for targeted annual returns of 4.5 to 5.5%.

daepun@hankyun.com