“Buying this property was a dream goal,” says Valerie Ramirez, founder and owner of Lab Studios in Los Angeles, CA. “It became a reality because of the good people around me.”
With a clientele that includes top talent in dance and choreography and projects for several of the most-recognized performers and brands in the world – including Nike, Body Armor, Mastercard, BTS, Blackpink, and Bad Bunny, to name a few – it would seem that Valerie could have approached any funder for financing. Here’s why she chose TMC Financing and the SBA 504 program for her ever-evolving creative-talent agency.
A pandemic pivot and continuous evolution
Lab had a different name and a different focus – to develop enthusiastic young hip-hop dancers into disciplined and determined industry professionals – since the time that Valerie launched her business when she was just 17 years old. Then, a huge change came five years ago.
“We couldn’t teach onsite during the pandemic and that gave us an unexpected opportunity to reconsider our vision and goals,” Valerie explains.
Lab pivoted to become a full-service talent management and production company. Today, Lab has a team of five remarkable women who run the essentials including day-to-day operations, creative output, and talent management. In addition, they work with a core group of about a dozen choreographers, dancers, movement directors and other creatives and bring on many more for project-specific opportunities – keeping the company to a size that enables the Lab team to focus on delivering the absolute best experience for every client, every time.
Valerie says, “We’re intentionally scaling at a level that lets us to hold onto our values for the team we’ve created – and for our commitment to exceptional experiences and elevated creative output. It also means that our work and energy never get stagnant or stale.”
Finding a dream building and making it work
The business pivot led to another significant change: Up through the pandemic, Lab was located in a 12,000-square-foot studio in West Covina. Valerie decided to downsize the space and move to Los Angeles, about 20 miles further west, to be closer to industry collaborators.
She’d looked at several spaces for lease but nothing felt right. Then, she met Brandon Burns, a commercial-property broker with Cushman & Wakefield in Los Angeles. He took her to see a building that hadn’t hit the market yet. It had a dirt floor and no working plumbing – but it also offered tremendous flexibility and a great location.
“We could envision what it could be and although it was out of our budget, I was sold and determined to make it work,” Valerie says.
The building’s owner made several improvements and Valerie signed a five-year lease with a goal of eventually buying it. When she inquired about a purchase three years into her lease, the owner’s asking price was too high. A year later, the owner reached back out to Valerie and they found their sweet spot.
The SBA 504 program and TMC Financing make it easier to own property
When it came to financing the purchase, once again, Valerie trusted her team.
“Brandon, our property broker, recommended TMC Financing and the SBA 504 program,” she says. “I trust his insight, so I really didn’t have to look any further than that.”
Soon, Valerie was in touch with TMC Business Development Officer Jennifer Davis, who reviewed the benefits of the SBA 504 loan program. SBA 504 loans are made in partnership between the business owner, a bank, and a certified development company (CDC), like TMC. It’s an outstanding option for small business owners who want to purchase commercial property for their businesses because it offers:
- A down payment of only 10% for most projects, which is significantly less than the 30-40% that’s required for conventional commercial mortgages. For a property like Lab’s, that would mean a down payment of $365,000 for a $3,650,000 deal.
- A fixed interest rate for the life of the loan, which can be from $50,000 to $5.5 million for the SBA 504 portion, with no maximum for the first mortgage. TMC has financed projects valued from $500,000 to $44 million.
- A 25-year term for most SBA 504 projects. This makes payments predictable and more affordable while stabilizing occupancy costs for decades.
“This was the first time that I purchased commercial property and it was more complex than I expected,” Valerie admits. “And, of course, there were a few hurdles along the way. But my TMC team was great, really helpful and supportive.”
“Working with Valerie to help her achieve her long-term goal for Lab was a wonderful experience,” says Jennifer. “A permanent home for Lab means that she and her team can move forward with confidence, knowing that everything they put into the business — financially and creatively — will build an even stronger foundation to achieve their business goals and help their clients achieve their dreams. That’s why TMC and this program exist and it’s a win all around.”
Along with stability and security, predictable occupancy costs, and the opportunity to build equity, Valerie says that the monthly payments are about the same as for their lease.
She mentions another benefit of ownership that’s a frequent concern when leasing property. “We’d already made about $300,000 in physical improvements while leasing,” she explains. “I didn’t want to invest more and risk losing that if we couldn’t buy the building. Now, we can move forward with everything we envision.”
TMC and the SBA 504 program help dreams become reality
“I’m so proud of what we’ve accomplished,” Valerie says. “Our outstanding team – all of the people that share our Lab vision and bring reciprocal energy – now have a home that reflects who we are, collectively, and that supports our vision, process, and creativity. It’s a sanctuary where we create and put these things out in the world. It was a dream and now we’ve done it. If you want this, know that it’s attainable, work for it, and do what it takes.”
If your business is located in our service area of California, Arizona, Nevada, Hawaii, and Oregon, contact TMC Financing to get started. If your business is located outside of our service area, try the SBA’s Lender Match tool to find a qualified certified development company (CDC) lending partner near you.
About TMC Financing
TMC Financing is a nonprofit 501(c)(4) Certified Development Company (CDC) with a mission to promote economic development and job creation by helping small businesses access affordable financing. Since its founding in 1981, TMC has provided approximately $16 billion in SBA 504 commercial real estate financing to over 8,000 small businesses across Arizona, California, Hawaii, Nevada, and Oregon. These efforts have helped create more than 63,000 jobs. TMC is recognized as the #1 SBA 504 lender in the nation, offering long-term, fixed-rate financing that empowers small business owners to purchase, construct or refinance real estate and major fixed assets to grow their operations.