Derek's loft is somewhere in the warehouse district. It's industrial and has at least one brick wall with a hole broken through it. There's a spiral staircase that leads upstairs, though we do not know what's up there. Derek's bed is in the main living space not far from the windows.
The loft has a security system, though it does little good. Boyd suggested flooding the loft with water and electrifying it to try to stop the alpha pack from killing Derek. Boyd ended up dying in the loft instead.
The loft became the site of blacklight party in 3x16 - Illuminated, because everyone believed that Derek was still away.
At some point, Derek installed a door out to the balcony where there was previously only a window, which Lydia uses to escape the party.