$33M Multifamily Deals Offer Upside

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LOS ANGELES-The buyers of two apartment complexes totaling 225 units that sold for a combined $32.5 million see significant upside potential in the properties, which generated “extensive offer activity,” broker Ron Harris of Marcus & Millichap’s Los Angeles office tells GlobeSt.com. The properties were the 104-unit Glenview Terrace Apartments at 2121 Valderas Dr. in Glendale and the 121-unit La Fayette Apartments at 249 La Fayette Place in the Mid-Wilshire district of Los Angeles.

Harris, who represented both the buyer and the seller in both sales, tells GlobeSt.com that both complexes were 100% occupied at the time of the sale and that both attracted multiple offers. Beverly Hills-based StarPoint Properties bought the Glendale complex from Glenview Terrace Apartments for $17 million, and Millennium Holdings of Los Angeles bought the La Fayette property from locally based LaFayette Park LLC for $15.5 million.

In the case of the Glenview Terrace Apartments, Harris points out that StarPoint, a specialist in adding value in multifamily deals, has a sizable budget for renovating the property and repositioning it to attract a more upscale tenant base. Harris tells GlobeSt.com that the property attracted significant investor interest because it represented “a rare opportunity to own a large, non-rent-controlled property in Glendale, which is a very desirable market.”

The 104 Glenview apartments range from bachelors to three-bedroom units, measuring from approximately 312 sf to 1,281 sf, with in-place rents range from $692 to $1,456. The complex was built in 1966 and had been owned by the seller since 1969.

In the case of the La Fayette Place apartments, Harris says that the buyer already owns a building of more than 100 units immediately adjacent to the complex and felt that the acquisition would create economies of scale that would add to its upside potential. The property was built in 1969 and had been owned by the seller since 1993.

The 121 La Fayette Park apartments range from bachelors to two-bedroom units that measure from 350 sf to 1,125 sf, with in-place rents of $568 to $1,370 at the time of the sale. Harris notes that the deal is further evidence of the influx of capital that is flowing into the Mid-Wilshire district as “opportunities become more limited” in the area.